Berlin Senate adopts new austerity measures

For the first time, in the coming year the city’s new debt will fall below the total sum of its capital expenditures. In subsequent years, the Senate wants to lower annual new debt from more than €2 billion at present, to a maximum of €900 million in 2010. To achieve this goal, all future increases in the city’s revenues are to be used to pay back the net borrowings and simultaneously lower primary expenditures.

This is a slap in the face to Berlin’s populace. In the past five years, they have already been forced to bear the brunt of massive cuts in public services, and now they confront the fact that the austerity measures will continue and any increase in revenues will not be used to improve their situation. Above all, this demonstrates the duplicity of the Left Party-PDS, which supported all the austerity measures in Berlin by arguing that such cuts were unavoidable and necessary to create financial conditions that could benefit the general population.

This becomes even clearer when comparing the expected increases in income to the planned decreases in expenditures. According to the Senate, the small increase in property taxes—coming into force January 1, 2007, and expected to bring additional revenues of approximately €220 million—means that “substantial steps have already been taken” on the income side. However, they have not given any consideration to an effective tax increase on those with high levels of private wealth or on business profits. In contrast, the cutting back of public expenditure is said to be a permanent task, with “strict spending discipline...being the highest requirement in future.”

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http://wsws.org/articles/2006/dec2006/berl-d22.shtml