Press
With “Maybrit Illner,” the Ifo president assumes a narrower welfare state. There is no way around savings when it comes to financing the Bundeswehr.
Berlin – The Traffic Light Coalition wants to make Germany fit for war. But how will the money be raised? Because if you want to double defense spending and at the same time comply with the debt brake, you have to make savings elsewhere. The largest item in the federal budget is the social budget, which accounts for almost 40 percent of government spending. The largest single item is pension insurance, for which the federal government has budgeted 127.3 billion euros in 2024. A further 47 billion euros are earmarked for social benefits.
Cuts in social benefits and pensions are being discussed – the Bundeswehr budget is to be significantly increased
Chancellor Olaf Scholz already made people sit up and take notice at the Munich Security Conference with statements that triggered a renewed debate about possible cuts in pensions and social spending. The Chancellor promised that Germany would increase defense spending in the long term. “Germany is investing two percent of its gross domestic product in defense this year and in the coming years, in the 1920s, the 1930s and beyond,” said Scholz at the conference.
He added: “My goal is that after the special fund expires, we finance the expenses for the Bundeswehr from the general budget.” According to calculations by the… mirror This would mean spending of almost 108 billion euros in 2028, while the current federal defense budget amounts to 52 billion euros.
Cuts in social benefits: Finance Minister calls for a moratorium on subsidies
But where will the money for higher defense spending come from? From the pots for social security contributions and the pension? Finance Minister Christian Lindner (FDP) is now calling for a multi-year moratorium on social spending and subsidies in order to be able to meet the desired defense budget.
“My point is not that we have to get rid of things now. You can discuss that too. But the most important thing is that there are not always new subsidies, new social spending, new standards,” he said FDP-Boss on Thursday evening on the ZDF show „Maybrit Illner“. There is already quite a lot of that. “If we managed to get by with what we have for three years, then that would be a really big step towards consolidation.”
Ifo boss on debate about possible cuts in social benefits: “This is a land of milk and honey.”
Green Party leader Ricarda Lang also said Germany needs to invest more money to support Ukraine and to help make Europe more independent of the USA in defense. But: “We must not pit external security against social security within the country.” It will not be possible to finance these tasks from the current budget. “We have to find other ways to do this.“
A top economist in Germany defended the statements. Clemens Fuest, President of the Ifo economic research institute, makes a clear announcement to Lang and Lindner. For his part, he assumes that there will be no way around cuts in the social sector. His statement also inevitably includes the pension. “Guns and butter—that would be nice if that were possible. But this is a land of milk and honey. That doesn’t work. “But cannons without butter,” says Fuest, who is also convinced that extra work in Germany is not sufficiently worthwhile. However, he rejected the feared abolition of the welfare state. In his opinion, this will continue to be financed. “But it will just be smaller.“