Municipal Debt Relief Fund (KEF)

Excerpt from the guide
"Kommunaler Entschuldungsfond Rheinland-Pfalz":

The "Rhineland-Palatinate Municipal Debt Relief Fund (KEF-RP)" is a component of the medium to long-term effective measures as part of the "Reform Agenda to Improve Municipal Finances" announced on June 8, 2010.
The financial volumes that need to be moved for debt relief / partial debt relief of municipal liquidity loans are enormous. On the other hand, these loans exist, they have to be serviced and threaten to increase further if no effective countermeasures are taken. There is therefore a need for far-reaching, long-term and sustainable measures that not only limit and reduce existing liquidity loans, but also prevent the imminent build-up of new liquidity loan obligations wherever possible.
As part of the reform agenda, the agreement on the "Rhineland-Palatinate Municipal Debt Relief Fund (KEF-RP)" was therefore signed on September 22, 2010 by Minister President Kurt Beck and the chairmen of the central municipal associations.
The debt relief fund will be established in accordance with this agreement on January 1, 2012. In principle, each local authority decides on its own responsibility within the framework of local self-government whether it will participate in the debt relief fund.
The contract for joining must be concluded by December 31, 2013 at the latest. The KEF-RP is intended to help local authorities to significantly reduce their liquidity loans totaling around EUR 4.6 billion accumulated by December 31, 2009.
The fund is to have a maximum total volume of EUR 3.825 billion and raise up to EUR 255 million per year over a term of 15 years. This will be used to repay up to two thirds of the municipal liquidity loans existing at the end of 2009 and to reduce the interest charges due (due to the system of the single fund, the local municipalities do not have any loans to secure liquidity; the liabilities to the local authority as at December 31, 2009 are decisive for participation in the KEF-RP). One third of the financing of the fund (EUR 1.275 billion) is to be provided by the municipalities themselves (e.g. through budget savings, tax or levy increases, etc.), a further third is provided from the municipal financial equalization and thus comes from the community of solidarity of the municipal family, and the final third comes from the state budget.
It should be noted that the municipal liquidity loans are distributed very differently from region to region and structurally. In many cases, it will be possible to achieve the greatest possible debt relief with the KEF-RP; in other cases, this will not be possible and it will only be possible to mitigate the development of debt. Overall, the KEF-RP is an important instrument which, if consistently designed and applied, can bring about a sustainable improvement in the municipal financial situation, especially if the KEF-RP measures are accompanied by a lasting change in awareness in both municipal and state politics as well as in federal politics.
The instruments of the KEF-RP (municipal consolidation measures and debt relief) are not sufficient on their own to ensure a sustainable budget balance. However, they are an important step that must be followed by further steps.

According to Section 5 of the consolidation agreement to be concluded, both the consolidation agreement and the evidence of the consolidation results must be published on the website.

Participating local churches: