Large financial shortfall of seven billion euros in the nation's budget - A prominent announcement reveals a shortage of 7 billion Euros in the country's budget.
In the heart of Germany, the state of Hesse is grappling with a significant financial challenge, as it faces a projected deficit of around seven billion euros in 2024. However, as of July 2025, a comprehensive and detailed fiscal plan addressing this shortfall has not been publicly disclosed.
Alexander Lorz, Hesse's Minister of Finance, has made several comments on fiscal pressures, particularly in the education sector. He has expressed concerns about the impact of the Hessian Higher Education Pact (HHSP) on universities, highlighting potential reductions in personnel budgets equivalent to 10%. Lorz warns that these cuts could jeopardise Hesse's research landscape, educational quality, and regional economy.
However, these comments do not constitute a broader deficit reduction plan. In a different context, Lorz has also voiced concerns about the OECD's Pillar Two global minimum tax, advocating for its suspension, citing potential negative impacts on German and European competitiveness. This stance reflects a position on international tax policy, not a direct response to Hesse's internal fiscal deficit.
A financial news item mentioned that Hesse is increasing its stake in the state-owned Landesbank Hessen-Thüringen. While this move may be part of an investment strategy, it does not appear to be a deficit reduction measure.
The absence of a clear, publicised plan suggests ongoing discussions and possibly emerging measures, but as of July 2025, no such plan has been formally communicated. The planned cuts in higher education funding, while significant, are not on a scale that would close a €7 billion gap, and do not appear to be part of a broader, multi-faceted fiscal consolidation effort.
As the state government prepares to present the 2026 state budget internally in October and submit it to the state parliament in November for the third and final reading at the beginning of 2026, the public and opposition groups are calling for a comprehensive course correction. The opposition AfD, in particular, has criticised the significant increase in subsidies and personnel expenses.
Minister Lorz has emphasised the need to work efficiently with existing personnel, utilising digitisation and streamlining processes to consolidate the budget and boost the economy. He has also proposed consolidating finances and investing in areas like education and security.
As the situation evolves, future announcements or budget documents may provide further clarity on Hesse's approach to addressing its substantial deficit.
- The lack of a publicly disclosed comprehensive fiscal plan, coupled with Alexander Lorz's comments on the Hessian Higher Education Pact and international tax policy, suggest that the community policy, employment policy, and business strategy of Hesse in addressing its projected deficit in 2024 might be more complex than initially anticipated.
- In the absence of a formal communication of a deficit reduction plan, the general-news remains curious about the strategies that the state government plans to implement in areas like finance, politics, and education, as they prepare to present the 2026 state budget.
