As Germany's government presses ahead with a program of reforms, one in focus is the country’s complex welfare system. Chancellor Friedrich Merz is pushing for a tougher approach to social spending. That has caused tensions within his coalition.

Berlin

Germany's coalition government is engaged in a debate over the affordability and future of the country's welfare state. Chancellor Merz has argued that the current system is financially unsustainable and requires changes, citing that the Labour and Social Affairs Ministry is projected to account for 38% of the national budget in upcoming years. In contrast, Social Democrat Party co-leader and Social Affairs Minister Bärbel Bass strongly rejected claims that the welfare state is unaffordable, noting that Germany's social spending is comparable to other industrialized nations. 

Despite their differences, both leaders agree on the need for reform, though their approaches vary. While Merz suggests reducing payments to unemployed individuals who miss job appointments, Bass emphasizes the legal and practical challenges of cutting social benefits. The government maintains a commitment to preserving the welfare state, even as discussions continue on how best to fund it.

German coalition disputes welfare state funding

Germany's welfare state, a cornerstone of its post-war democracy, redistributing wealth to help those in need to stand on their own two feet. But Chancellor Merz says it's unaffordable. The welfare state that we have today can no longer be financed with what we produce in the economy. So we have to change it. Every year, the government pays out billions in pensions for the elderly, funding for the health care insurance system and support for the country's around three million unemployed. The projection for spending in 2026 shows the Labour and Social Affairs Ministry responsible for pensioners and those without work will account for 38% of the total budget, far more than any other ministry. But Social Democrat Party co-leader Bärbel Bass, who is also the Social Affairs Minister, used a strong expletive when she dismissed the idea that Germany can no longer afford its welfare state. This debate that we can no longer afford our social insurance systems and our welfare state is, and I apologise for the language, bulls***. In fact, when compared to the size of its economy, Germany's social spending is similar to that of other industrialised countries. But in addition to the cost, the welfare system is complex. It tries to address not just poverty, but also the needs of families and those with disabilities, as well as issues like housing. Trimming bits off it would not be easy, not least because many of these commitments are enshrined in law. Despite her criticisms, the SPD's Bärbel Bass agrees reform is needed. And while Friedrich Merz wants to reduce the social spend, for instance by cutting payments to the unemployed if they fail to turn up to job appointments, he's not questioning the principle. We agree that we want to preserve the welfare state. So for now, the government parties are claiming they're back in harmony, despite divisions over how to pay for welfare.

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