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Germany's Bavaria state to file lawsuit over fiscal transfers

(Xinhua)

16:07, July 18, 2012

BERLIN, July 17 (Xinhua) -- Bavaria state, the largest fiscal donor so far in Germany, announced on Tuesday its decision to file a lawsuit in the constitutional court over the country's fiscal transfer program.

The complaint of the southern state is directed against a "serious imbalance in the system," according to Bavarian Governor Horst Seehofer, leader of the Christian Social Union (CSU), a partner party of the ruling Christian Democratic Union (CDU).

Bavaria's cabinet decided to file the complaint to the Federal Constitutional Court in Karlsruhe by the end of the year, claiming that under the current system, it is unfair for only four out of the 16 states in the country to pay for the transfer scheme.

"We are happy to show solidarity but we're not stupid," Bavarian Finance Minister Markus Soeder said, noting that rich states had given some 7.3 billion euros (9.0 billion U.S. dollars) to poorer states, including 3.7 billion euros from Bavaria alone in 2011.

Bavarian government said the fiscal transfer is a kind of "Berlin-bond," with Bavaria being the paymaster and Berlin getting the most money out of it. Bavaria called its decision as a "protection of Bavarian taxpayers' money."

In response to criticism from the opposition SPD party and Left Party, which accused Bavaria of undermining German federal solidarity, Seehofer said, "It's about the extent of the payments and not the question of whether to pay." (1 euro = 1.22 U.S. dollars)

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