City of Rostock Ceases Operations
The Hanseatic city of Rostock, Germany, has announced a budget freeze due to its precarious financial situation. The move is part of a larger trend among municipalities in the country, with the state capital Schwerin also implementing similar measures.
Mayor Eva-Maria Kroger (The Left) made the announcement, citing rising costs in almost all areas and administrative expenses that have significantly exceeded revenues in Rostock. The budget freeze is necessary, she said, to address these financial difficulties.
The budget freeze will come into effect from Thursday and will not affect the city's investment projects. Voluntary services in Rostock will be frozen at their current level, while mandatory tasks and contractually bound services will continue to be funded.
The current budget forecast for this year is bleak in Rostock. The city aims to achieve savings of up to twelve million euros this year through the measures taken.
Seven million euros more in burden due to the high wage agreement is one factor contributing to Rostock's financial difficulties. Eight million euros less in allocations from the state is another, resulting from census results.
The deeper causes for the financial predicament in Rostock are rising social burdens, weak economic growth, new wage agreements, and underfunding of cities and municipalities.
Rostock is not alone in facing these challenges. Other municipalities in Germany are also experiencing financial difficulties, as indicated by the budget freezes in various cities.
The city's finance senator, Chris von Wrycz Rekowski, has emphasised the need for belt-tightening in Rostock. Mayor Kroger echoed this sentiment, stating that it's unfortunately time to tighten belts in Rostock.
Despite the budget freeze, Rostock remains committed to maintaining its services and investment projects, demonstrating resilience in the face of financial adversity.
The budget freeze in Rostock, a Hanseatic city in Germany, is due to significant financial difficulties caused by a combination of rising costs, administrative expenses exceeding revenues, and added burdens like a high wage agreement and less state funding. This move is part of a larger trend, with other municipalities in the country implementing similar measures. In the business world, Rostock's financial predicament is a result of increasing social burdens, weak economic growth, new wage agreements, and underfunding of cities and municipalities.
