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Debate about the bloated German welfare state: “A fairy tale that is not backed by facts”

2024-02-27T20:03:04.393Z

Highlights: Debate about the bloated German welfare state: “A fairy tale that is not backed by facts”. Germany “unremarkable” when it comes to social spending compared to international standards. New data analysis by the trade union-affiliated Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans Böckler Foundation suggests that government and social spending in Germany is neither particularly high in international nor historical comparison. For comparison: in the leader New Zealand, real social spending increased by 136 percent.



As of: February 27, 2024, 8:51 p.m

By: Lisa Mayerhofer

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In particular, the twelve percent increase in citizens' allowance at the beginning of the year is repeatedly criticized by some politicians in this context.

(Archive image) © Sina Schuldt/dpa

The German economy is in the doldrums - should the state therefore save on social security contributions?

A new study puts critics of the “bloated” German welfare state in their place.

Berlin – The economic situation is difficult, while spending – for example on defense – is growing.

Should savings be made now in the social sector?

This is currently being hotly debated.

Chancellor Olaf Scholz (SPD) strictly rejects social cuts and the dismantling of workers' rights.

The CDU and CSU, on the other hand, want to approach pensions by raising the retirement age.

Finance Minister Christian Lindner (FDP) even suggested a multi-year moratorium on social spending and subsidies in order to be able to invest more money in defense.

In particular, the twelve percent increase in citizens' allowance at the beginning of the year is repeatedly criticized by some politicians in this context.

But are social security contributions actually too high?

There are now new numbers for this.

Germany “unremarkable” when it comes to social spending compared to international standards

A new data analysis by the trade union-affiliated Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans Böckler Foundation suggests that government and social spending in Germany is neither particularly high in international nor historical comparison - and has not grown much recently.

“Anyone who speaks of a welfare state that is growing unchecked, or that the state is generally becoming more and more bloated, is spreading a myth that is not backed up by facts,” says Sebastian Dullien, scientific director of the IMK, summarizing the study in a statement.

In comparison with other industrialized countries, it shows that the growth of real public social spending in Germany has been unremarkable over the past 20 years, according to the IMK.

Among the 27 countries of the industrialized nations organization OECD for which the most current data is available from 2002 to 2022, Germany ranks third from last with an increase of 26 percent for the entire period, making it one of the countries with the lowest growth.

For comparison: in the leader New Zealand, real social spending increased by 136 percent.

Social contributions: Economist warns of rising social contributions

Other economists vacillate between approval and criticism in view of the IMK's results.

“When it comes to these national quotas, Germany is usually in the middle and not at the top,” says economist and professor of socioeconomics at the University of Duisburg-Essen, Achim Truger, to the

Rheinische Post.

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Ifo President Clemens Fuest takes a more critical view.

For him, an important factor is that although unemployment has fallen significantly over the past 20 years, this development is not reflected in social spending.

“If the rules in the welfare state remain unchanged, social spending should also fall.

But they don’t do that,” he tells the

Rheinische Post

.

Fuest cites the increasing health care costs due to the aging population as the main reason for this.

He calls for a look into the future: “Aging will further increase the pressure for more social spending, while at the same time the income of the welfare state is falling because fewer and fewer people are working,” he tells the newspaper.

The government also needs to spend more money on defense and decarbonization.

With material from dpa

Source: merkur

All news articles on 2024-02-27

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