Chancellor Olaf Scholz has ruled out serious cuts in social benefits due to the budget crisis. “In such a situation there will be no dismantling of the welfare state in Germany,” said Scholz at the SPD federal party conference in Berlin. The welfare state is one of the greatest achievements that Germany has achieved. It is part of the country’s DNA, its self-image, that no one will be given up. That is the basis of prosperity, said Scholz.
The talks with the FDP and the Greens are a “very difficult task”. But he wanted to convey confidence “that it will succeed,” the Chancellor added. “We are not faced with an unsolvable task.” Scholz did not give any details. The Chancellor will continue to negotiate the 2024 budget with Finance Minister Christian Lindner (FDP) and Vice Chancellor Robert Habeck (Greens) on Sunday. In addition to budget savings, the SPD and the Greens are also calling for a renewed suspension of the debt brake; the FDP has so far rejected this.
In the debate about citizens’ money, Scholz recalled that the Union had also approved the law. “In a situation like this you have to resist,” he said about calls to limit or suspend the increase for those receiving citizens’ benefit next year.
The budget crisis is the topic dominating the party conference. The newly re-elected SPD leadership of Lars Klingbeil and Saskia Esken is in favor of suspending the debt brake in 2024 and is resisting the social cuts and cuts in investments demanded by the FDP. Instead, Esken and Klingbeil sympathize with tax increases.
A key proposal from the party executive committee, which calls for a reform of the debt brake, was already passed on Friday. “The debt brake has become a risk to the prosperity of our country,” said Klingbeil, justifying the application. “While others are igniting the turbo into the future, we in Germany are putting on the handbrake,” he added, referring to billions in investments in the USA, China, India and South Korea.
The demand to ask the super-rich to pay with a one-off “crisis levy” has also already been decided. In return, income tax should be reduced for 95 percent of the population. It is quite possible that the largest government party will give its chancellor further messages at the first federal party conference in two years that will make the already complicated budget negotiations more difficult for him.
Criticism of the government’s refugee course
The number two conflict topic at the party conference is migration policy. With a compromise proposal, the SPD leadership wants to appease critics of the government’s course on the issue. Among other things, it supports the controversial sea rescue of refugees in the Mediterranean and calls for facilitating the reunification of family members of refugees.
The SPD recently suffered heavy defeats in the state elections in Hesse and Bavaria. It fell in the polls in the first two years of the legislative period. It is currently only between 14 and 17 percent. In the 2021 federal election, it became the strongest party with 25.7 percent. And the Chancellor himself isn’t doing well either. In a Yougov survey, 74 percent said he was doing a very bad or rather bad job.