Germany's Leading Chancellor Candidate Proposes $105 Billion Social Spending Cuts
Investing.com -- The leading conservative candidate for the elections in Germany scheduled for February has proposed cuts of 100 billion euros ($105 billion) in migration and social spending. This proposal is part of a broader plan to address the country's fiscal situation.
Friedrich Merz, leader of the Christian Democratic Union (CDU), has adopted a markedly different approach to politics compared to current Chancellor Olaf Scholz. Scholz has avoided cuts to social benefits, despite imposing a significant burden on taxpayers. At a press conference held in Berlin, Merz criticized Scholz by linking Germany's economic downturn to the policies of the Social Democrats.
Germany's economy is expected to contract for the second consecutive year, affected by declining exports and rising energy costs following Russia's invasion of Ukraine. The incoming government will need to secure funding and public support for major investments aimed at modernizing the country’s aging infrastructure, strengthening defense capabilities, and addressing the potential return of Donald Trump to the presidency in the United States.
Merz, who is also the leader of the CDU/CSU alliance, stated on Tuesday that Scholz has lost the confidence of investors, leading to capital flight from the country. He expressed his intention to lower the corporate tax rate to 25% and reiterated his readiness to take on government responsibility in Germany.
The proposed budget for Germany in 2025 is 488 billion euros, of which 179 billion euros is allocated for labor and social spending. The election campaign officially began on Monday with Scholz losing a vote of confidence in the lower house of parliament, leading to the federal elections being scheduled for February 23, seven months earlier than initially planned. Scholz's minority government will remain in office until a new government is formed.
Scholz's party, the Social Democrats, along with former coalition partners the Free Democrats and the Greens, are struggling in the polls.