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Germany and its churches wrangle over Napoleon's asset grab

Insa Wrede
June 13, 2023

Why the German state pays millions of euros to the Christian churches each year, and how shedding the financial burden could cost it dearly.

A nightview over the Rhine River with the illuminated Cologne Cathederal on the other side, and ferry boats lined up along the river.
The two main churches still own huge and expensive properties in GermanyImage: Marc Rasmus/imageBROKER/picture alliance

Every year, large sums of money flow to the two major Christian churches in Germany. Last year, they received more than €600 million ($645 million) in state funding on top of the billions in church tax the clergy gets.

Understanding why huge state allowances go to the Catholic and Protestant Church takes us back more than two centuries to the 20 years of Napoleon's occupation of Germany at the beginning of the 19th century. After defeating what was then the first German Reich, the French ruler ordered a far-reaching separation of church and state, including the closure and expropriation of monasteries and other ecclesiastical institutions.

A law dating back to 1803 and called "Reichsdeputationshauptschluss" — often referred to in English as the Imperial Recess of 1803 — forced the churches to hand over money and land to often neighboring secular principalities. As a form of compensation, they, in return, agreed to pay the salaries of senior clergymen and other costs of the churches.

To this day, the 16 German regional states, as legal successors to the princes, pay these compensations.

A painting showing Napoleon arrive in Berlin after defeating Prussia
When Napoleon conquered Germany, his four-year reign meant bad times for the clergyImage: Gemeinfrei

Hangs in the balance for more than a century

Yet, it was actually decided as early as 1919 that these payments should end with a one-off payment. It was first enshrined in the constitution of the Weimar Republic. Postwar Germany also said it would abide by the regulation and made it part of the country's new constitution — the Basic Law — adopted in 1949.

And still, the regular payments from the state to churches continue to this very day, having risen over time from about €23 million in 1949 to €602 million in 2023.

Surprisingly, Germany's 16 regional states seem to be quite satisfied with the current status quo, says Hans Michael Heinig. The expert on ecclesiastical law told DW that the two churches have no interest in paying a one-off "sum of redemption."

"The churches are quite satisfied because they have solvent debtors and these state payments flow regularly."

However, from an economic point of view, the states got a bad deal because they would have been able to make the one-time payment long ago, the expert from Göttingen University added.

The German government in Berlin now wants to end the state payments for good. A working group has been set up in the interior ministry, in which the central government, the state governments and church officials are hoping to find a compromise solution.

The talks, scheduled to last until the end of the year, are to stipulate the amount of money to be paid to the churches as compensation, and for how long the current payments should continue.

The cross of the lord Jesus Christ
The two main churches are still an important societal force to reckon with in GermanyImage: Hasenonkel/YAY Images/IMAGO

Huge riches at stake

A 2020 draft bill introduced by the then opposition parties of the neoliberal FDP, the Left Party and the environmentalist Greens shows how much money is at stake in a deal. The sum swirling about the debate is in the region of €11 billion — 18.6 times the current annual payments and to be paid over 20 years. Of course, they would have to continue paying the current state allowance — €600 million — for those number of years.

Münster-based constitutional law expert Bodo Pieroth believes the compensation is completely overblown as it would far exceed the original value of the church properties expropriated.

At an annual rate of interest of 3%, he calculated for DW, the churches would have received 194 times more than the original value over the last 100 years — at 5% it would have been about 600 times more.

Church expert Heinig doesn't accept the calculation, arguing that the churches have been "deprived of assets from which they could have made profits" and that the state allowances are merely compensating for the lost revenue. "If I occupy a house as a tenant for a long time and then want to buy the house, I don't get credit for the rent I've paid either," Henig told DW.

Can the churches do without?

The state payments are only a small part of church income in Germany, with taxes to the tune of €13 billion annually making up the bulk of it. In addition, there's a sizable amount of income from church assets about which the clergy keeps mum. The two churches are said to be the biggest landlords in Germany, owning forests, farmland and other real estate, as well as holding stakes in businesses such as publishing houses, breweries, banks and insurance companies.

"Both churches are estimated to have a combined annual turnover of €150 billion," says Carsten Frerk, a journalist who has been looking into church revenues for years. Income from about 50,000 individual companies and legal entities make any official church figures look "opaque," he told DW, as he estimated the total assets of the two churches to be worth about €300 billion.

Frerk says the services offered by the churches to the population at large, including child care, nursing homes or hospitals, and their international financial obligations would not be at risk if the state allowances were to be eliminated. "There is no connection whatsoever between state benefits and the churches' social tasks. Only a maximum of 2% of these institutions are financed by the churches themselves," said Frerk. 

Caritas workers unloading relief cargo for a volcano eruption in Congo
The churches international aid and relief efforts wouldn't be in danger if state money would cease to flowImage: picture-alliance/KNA-Bild/W. Radtke

No way out

Church expert Heinig believes the entire process is flawed due to the absence of a precise deadline by which a solution must be found. Not even the German Constitutional Court can step in and push for a resolution. After all, there's nothing to gain politically from a deal as at least one side would be unhappy with a likely compromise.

All this against the background of an increasingly secular German population of which only half still belongs to one of the two confessions, and membership estimated to decrease by another 50% by 2060. In contrast to current political fears, criticism about a likely deal may simply die of indifference on the part of the people or a general lack of knowledge about the complex history behind it.

This article was originally written in German.

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