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Eurointelligence Daily Briefing: Geithner says European fiscal adjustment policies are futile (20.03.2012)
Impoverished cities in Northrhine-Westphalia don't want to pay for East-Germany any more

The anticipated elections in Northrhine-Westphalia, with 18m inhabitants Germany's largest federal state, put a strain on intra-German solidarity. Several mayors of highly indebted cities in the state have asked to put an end to the intra-German solidarity mechanism that sees billions of euros flow from the West to the East of the country, Süddeutsche Zeitung reports on its front page. ,,The solidarity pact for the East is a perverse instrument that no longer has any justification", Ullrich Sierau, the social democratic mayor of Dortmund told the paper. The solidarity pact foresees that €156bn will have been transferred between 2005 and 2019 between the West and the East irrespective of the financial situation of the payer and the receiver. The mayors of Essen and Oberhausen told the paper similar things. All of these cities are heavily indebted and had to close public institutions while some of the cities in the east were doing better financially.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
by Carrie (migeru at eurotrib dot com) on Tue Mar 20th, 2012 at 07:06:53 AM EST

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