Saxony's Minister President Michael Kretschmer is preparing the state for difficult times in view of tight budgets. "There will have to be cuts in all areas," said the CDU politician after a budget meeting on the future double budget. There is currently a shortfall of around 2.3 billion euros this year and around two billion euros next year. "We've never seen anything like this before."
Saxony draws on reserves
According to Kretschmer, Saxony will use the budget equalization reserve - currently around 1.2 billion euros - and pay 270 million euros less per year into the generation fund to compensate for the deficit. The fund is intended to cushion the state's future pension burdens. A change in the repayment of loans to cope with the coronavirus pandemic is also planned. This will bring provisional savings of 130 million euros per year.
The concept for covering the budget also provides for reductions in expenditure on personnel and material costs in the administration and state-owned companies. Funds for the co-financing of EU and federal funding programs are also to be reduced. In addition, the Free State wants to reduce bureaucracy, do without reports and lower standards.
