Chancellor Friedrich Merz called for reform of Germany's social welfare spending, saying the current welfare state can no longer be financed by domestic economic output. The coalition partners previously agreed to reform the social insurance system covering health insurance, pensions and unemployment benefits because of rising costs and budget gaps. Merz acknowledged that making cuts would be politically difficult for the centre-left SPD but urged cooperation. He simultaneously ruled out any increase in income tax on medium-sized companies under his leadership. SPD figures said reforms should protect people in need and avoid simple benefit cuts.
The welfare state that we have today can no longer be financed with what we produce in the economy,
not be any increase in income tax on medium-sized companies in Germany with this federal government under my leadership,
We will remain a country that helps people who have fallen onto hard times, who have gotten sick and need help,
the SPD cannot give an inch.
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