CSU proposes 'extremism clause' to cut fiscal transfers to states governed by AfD or Left Party

With the "extremism clause," the CSU wants to pay less money to states where the AfD and the Left party may govern in the future. Now the party's general secretary is also defending the idea.

Markus Söder, CSU chairman and Bavarian Minister-President, speaking at a CSU event in Munich on September 14, 2026.

CSU General Secretary Martin Huber has defended the idea of an "extremism clause" in Germany's fiscal equalization system against criticism. "Fiscal equalization is generally unjust. It has to be reformed anyway," Huber said Friday on ARD's Morgenmagazin. He added that it would be "absurd" to use money from the mechanism to support state governments that "clearly violate our constitution."

Huber pointed to the two states of Saxony-Anhalt and Berlin, where governments led by the AfD and the Left party could potentially form. The Left in Berlin, for instance, is planning "expropriations," he said. "No one can explain why such things should ultimately be paid for by Bavarian taxpayers."

In Berlin, the Left party aims to form a red-green-red government with the Greens and SPD following the September state election. The parties have since agreed on an exploratory paper as the basis for further talks. Among other things, it envisions the socialization of housing stock owned by large real estate companies that hold more than 10,000 apartments in Berlin. The companies would be compensated for this.

The idea of an "extremism clause" in fiscal equalization was raised by Bavarian Minister-President and CSU leader Markus Söder. According to him, Bavaria is in talks with the two other contributing states, Hesse and Baden-Württemberg, about a corresponding regulation. The response to his proposal has been mixed.

Support came from Hesse's Minister-President Boris Rhein (CDU). The current chairman of the Minister-Presidents' Conference, Rhineland-Palatinate's Minister-President Gordon Schnieder (CDU), rejected the proposal. He considered it "the wrong path."

Fiscal equalization is part of the complex financial relations between the federal government and the states. It is intended to mitigate economic imbalances and ensure that people across the country have roughly equal living conditions. Currently, three states—Bavaria, Hesse, and Baden-Württemberg—pay in more money than they receive. The system has long been controversial. Bavaria has been sharply critical and filed a complaint against it before the Federal Constitutional Court.

The CSU is gathering in Munich from Friday afternoon for a two-day party conference. On Friday, a speech by Söder will be the focus, and on Saturday, Federal Chancellor Friedrich Merz (CDU) is expected to attend.