Two German states to challenge ‘Robin Hood’ scheme

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Two German states decided on Tuesday to lodge a complaint with the country’s top court against a programme under which they and other wealthy regions transfer funds to poorer ones.

Officials in the western state of Hesse, home of the financial capital Frankfurt, and Bavaria, where Munich is located, said after a joint meeting of their cabinets that they would take their case to the Federal Constitutional Court, Hesse’s premier Volker Bouffier said.

Volker Bouffier and his Bavaria counterpart Horst Seehofer who respectively are from the conservative Christian Democrats and its Bavarian sister party, the Christian Social Union, described the step as “self-defence”.

Voters in Bavaria are expected to go to the polls on September 15 while Hesse is expected to vote a week later on the same projected day as general elections when Chancellor Angela Merkel will fight for a third term in office.

German regions have major discrepancies of wealth, particularly between the former communist eastern states and the more prosperous west, although there are notable exceptions.

The refinancing system is designed to even out differences in Germans’ standard of living to underpin political stability.

Last year, Bavaria, Hesse and Baden-Wuerttemberg, plus three other regions, paid into the programme a total of 7.9 billion euros ($10.7 billion), of which Bavaria alone stumped up 3.9 billion euros.

Cash-strapped Berlin, a city-state, benefited most from among the 13 recipient states.

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http://www.globalpost.com/dispatch/news/afp/130205/two-german-states-challenge-robin-hood-scheme

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