Kommunalfinanzen in Zeiten steigender Zinsen

Rising interest rates will impact municipal budgets in Germany by increasing the cost of loans and making it more difficult to finance necessary investments in infrastructure and transformation. While most municipalities should have sufficient leeway to deal with higher interest rates, highly indebted municipalities may be strongly affected by rising interest rates. In these municipalities, interest costs are increasing strongly, budgetary margins are narrower anyway, and these municipalities are more dependent on loans to finance their investments. Rising interest rates thus once again reveal the unresolved and fundamental challenges for the municipal financial system in Germany.