Will we have a heated autumn of debate in Germany due to the deep reform of the welfare state? The Chancellor's statement on the German welfare state brings reactions.
Desired! Coveted! Criticized! The German welfare state, so well-known, is not doing well: Be it health insurance, long-term care insurance for the elderly, pensions or unemployment benefits.
In all these sectors, the federal government must regularly inject large amounts of state tax revenue to avoid the collapse of the welfare state.
Upon coming to power, the CDU/CSU-SPD governing coalition promised comprehensive reforms of the welfare state and the modernization of Germany's social security systems.
But there is disagreement about how to achieve this.
Chancellor Merz's appeal
A recent statement by German Chancellor Friedrich Merz suggests that in the coming months in Germany there will be strong debates both within the coalition and in German society regarding these reforms.
Where will there be reform, cuts, and how severe will they be?
"The welfare state as we have it today is no longer financially viable with what we are achieving economically," the German chancellor said at a conference of the Lower Saxony CDU party in Osnabrück over the weekend (August 23.08), emphasizing the need for a reorganization of social policies.
"I will not allow myself to be irritated by words like social cuts, hard labor and the other things that go with them," said Merz, addressing his Social Democratic partner. "But the appeal is to all of us: Let us show together that change is possible, that reforms are possible."
SPD does not rule out tax increases
Chancellor Merz's reaction came after the SPD's proposal to increase taxes.
Vice-Chancellor Lars Klingbeil of the Social Democrats had previously stated that he would not rule out higher taxes for high-income earners and the wealthy.
"No option is off the table," the SPD leader told ZDF television.
Klingbeil as Finance Minister must fill billions of dollars in gaps in future federal budgets.
More Helmut Kohl: SPD reminds CDU of the 90s
Social Democrat Lars Klingbeil supports the reforms, but warns of social injustice.
"We need structural reforms to keep social contributions sustainable in the long term," Klingbeil told the Funke media group.
According to the German Finance Minister, all reforms must adhere to the principle: "We remain a country that helps people who are in need, who get sick and need help."
The Prime Minister of Rhineland-Palatinate (Rheinland Pfalz) Alexander Schweitzer, also a Social Democrat, sees the solution in maximizing taxes on the super-rich.
Schweitzer reminded the CDU of the time of Chancellor Helmut Kohl, saying that this party must "dare to be more like Helmut Kohl."
In the mid-1990s, the maximum tax rate was 56 percent, and there was also a wealth tax.
"Nobody had the impression then that socialism reigned in Germany. It serves democracy to hold accountable those who are so rich that they will never be in trouble again," Schweitzer told Tagesspiegel.
CDU rules out tax hikes
The tax increase is ruled out by the CDU, the largest partner in the German governing coalition.
Chancellor Merz ruled out any additional burden on small and medium-sized businesses.
"With this federal government under my leadership, there will be no increase in income tax for small and medium-sized enterprises in Germany," Merz said, although there are some within the SPD who are "happy to discuss tax increases."
The Chancellor expressed criticism of the coalition government's work with the Social Democrats so far.
"I am not satisfied with what we have achieved so far. We need more," he said, although he noted that a new migration policy had been launched and impulses for an economic turnaround had been given.
Merz wants a more “migration-critical and industry-friendly” SPD.
"Autumn of social atrocities"?
Chancellor Merz received support after the statement on the problems of the welfare state by CDU Secretary General Carsten Linnemann.
The CDU politician called for a "paradigm shift" regarding citizen's aid (Bürgergeld): Germany is with its shoulders against the wall "because the welfare state has become unaffordable," he told the "Neue Osnabrücker Zeitung."
But the idea of SPD Vice Chancellor Klingbeil to increase taxes is also supported by the SPD.
The head of Juso, the Social Democratic youth organization, Philipp Türmer, declared social cuts as a red line for the SPD.
"If the idea behind an autumn of reforms is to cut social services and benefits, I can say unequivocally: the SPD cannot move even an inch in that direction," Türmer told the Stuttgarter Zeitung.
After Merz's statement, the opposition Left Party also reacted: The chairwoman of the Left Party parliamentary group, Heidi Reichinnek, warned of an "autumn of social cruelty."
Currently, we are seeing "how labor rights and the welfare state are being attacked in a massive campaign by think tanks, employers' associations and so-called experts," Reichinnek told the AFP news agency. The CDU/CSU is "leading the attack." Reichinnek called for a reactivation of the wealth tax.
Work has already begun. A new commission starting in September will propose reforms to social benefits, such as the citizen's allowance, housing allowance and child allowance.
The State Social Commission, appointed by Labor Minister Bärbel Bas (SPD), is expected to present its results by the end of 2025.
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