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“Guns and butter”: Ifo boss believes cuts in social benefits are inevitable

2024-02-24T19:32:26.454Z

Highlights: “Guns and butter”: Ifo boss believes cuts in social benefits are inevitable. Finance Minister calls for a multi-year moratorium on social spending and subsidies. German family business files for bankruptcy - 150 employees affected read Retirement age for those born in 1960: You're still in luck. Read: German heating manufacturer abolishes gas heating: Will Habeck's law be a success? read This is how much less pension statutory insured pensioners will receive from March reading.



As of: February 24, 2024, 8:14 p.m

By: Mark Stoffers

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President of the Ifo economic research institute makes a clear statement to Lang and Lindner when it comes to simultaneous financing for weapons and the welfare state.

© ZDF screenshot

With “Maybrit Illner”, the Ifo president assumes a narrower welfare state.

There is no avoiding 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 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,” Scholz said 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 Spiegel

calculations, 

 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 increased defense spending come from?

From the pots for social security contributions and pensions?

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.

“I'm not concerned with the fact that we have to get rid of things now.

This can also be discussed.

But the most important thing is that there are not always new subsidies, new social spending, new standards,” said the FDP leader on Thursday evening in the ZDF program “Maybrit Illner”.

There is already quite a lot of that.

“If we could manage 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 must invest more money to support Ukraine and to help make Europe more independent of the US in defense.

But: “We must not play external security off 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.”

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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.

“Cannons 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.”

Source: merkur

All news articles on 2024-02-24

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