Exclusion of some countries from financial equalization - would that be possible?

Exclusion from state financial equalization Söder wants an extremism clause - but would that be possible? As of: October 22, 2026 • 3:27 p.m

Markus Söder wants to exclude federal states with "extremist" government participation from state financial equalization - and is looking at Berlin and Saxony-Anhalt. But would that even be possible?

The Bavarian Prime Minister Markus Söder (CSU) is pushing for federal states with “extremist” government participation to be cut off from money from the state financial equalization system. “We will not support any state policy that wants expropriations and preaches anti-Semitism,” said the CSU leader in the Augsburger Allgemeine.

According to Söder, Berlin and Saxony-Anhalt would be affected by such a regulation if discussions between the parties there lead to appropriate alliances in favor of the Left Party and the AfD.

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Bavaria pays almost twelve billion euros, by far the highest state contribution, into the “federal financial equalization” pot - Hesse, Baden-Württemberg, Hamburg and the federal government transfer additional sums.

These are Söder's most important interlocutors if he wants to change the system, because all of the other twelve federal states receive millions or billions from the financial equalization. The highest amount of four billion goes to the financially weak Berlin. There are no political guidelines linked to this.

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If this hurdle were overcome, the Financial Equalization Act could be supplemented with an extremism clause. This would require a simple majority in the Bundestag and Bundesrat. The potential Berlin left-wing coalition partners SPD and Greens would probably stop the project at the latest in the politically fragmented state chamber. Or the state of Berlin would sue in Karlsruhe.

So Söder would have to go straight to Article 107 of the Basic Law, which regulates finances and financial equalization. However, a change to the Basic Law requires a two-thirds majority in the Bundestag and Bundesrat - that is even more difficult than a simple majority.

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It would also be important that Söder convinces at least the four donor countries of his idea. Hesse's head of government Boris Rhein (CDU) told the Kölner Stadt-Anzeiger that he finds it inconceivable that extremist-led coalitions in Germany are co-financed by Hessian tax money. Baden-Württemberg is also open, but does not want to make this dependent on the party color of a prime minister. “Our compass is the Basic Law,” said Baden-Württemberg Prime Minister Cem Özdemir.

Hamburg's first mayor, Peter Tschentscher from the SPD, has already rejected a reorganization of the state financial equalization system.

There is already great reluctance among the recipient countries. The CDU politician Gordon Schnieder does not think the Söder plan is the right idea. Schnieder is not only Prime Minister of Rhineland-Palatinate, but is also currently head of the Prime Minister's Conference. Before the meeting, he made it clear: "The state financial equalization is often discussed. I believe that it is not suitable for clarifying all questions about it."

His Bremen colleague, Andreas Bovenschulte, is just as skeptical. You have to “leave the church in the village a little bit with special regulations for certain federal states,” he thinks.

In the long term, Söder could have the Basic Law on his side: During the last complicated renegotiations of the state financial equalization six years ago, Article 143f was included in the Basic Law: After that, the financial equalization ends automatically if the federal government, the Bundestag or at least three federal states want to officially renegotiate it, but then either nothing happens for five years or the renegotiations fail.

However, the starting point for this exit route is also in the Basic Law: January 1, 2031 - far too late, for example, for the Berlin coalition to be formed.

This topic in the program: tagesschau24 | News | Oct 22, 2026 | 11:00 a.m.NDR Info | News | Oct 22, 2026 | 1:37 p.m