Economic crisis and uncontrolled immigration have weighed down Berlin’s budgets. Merz wants to take action by raising the retirement age. An extreme move that will give new impetus to the right-wing AfD in the elections.
Taking a look in Germany we would have to be Machiavellianly satisfied. Berlin he will cut pensions, reduce benefits, bid farewell to his boast welfare and a very energetic crackdown on migration and reception policy is expected.
There Germany it spends 41% of its budget on welfare, equal to 1,345 billion euros a year, like the entire GDP of the Netherlands. The government of Friedrich Merz it’s like the Teutonic national football team returning from the World Cup as a walk-on: they know they missed the penalty. He finds himself in the middle ground: if he doesn’t cut pensions they’ll mess up the accounts, but if he cuts them he offers toAfd Of Alice Weidel a deadly counterattack. It has 127 thousand jobs lost since the beginning of the year (in the last 48 months there have been 341 thousand layoffs) and the Volkswagen announces a further reduction of 100 thousand positions. He wrote Niccolo Machiavelli: «All times return, men are always the same». Fifteen years after the infamous letter with which the outgoing and incoming leaders of the ECB – Jean-Claude Trichet And Mario Draghi – with the ill-concealed satisfaction of Giorgio Napolitanothen President of the Republic who, as a communist, had praised the carnage of the Soviet tanks in Budapest, evicted Silvio Berlusconiin Berlin we experience more or less the same situation.
From the ECB’s letter to the collapse of the German model
On 5 August 2011 they wrote to Italy from Frankfurt: you must massacre pensions. The government took office Mario Monti and on December 4th a tearful one Elsa Fornero announced: forget about the INPS check. 400 thousand “fell” on the ground exoduses without salary and without allowance. One year later – it was 17 December 2012 – Angela Merkelthe iron chancellor who preached rigor, rigor, rigor argued in an interview with the Financial Times: «If Europe today has 7% of the world population, represents around 25% of the world GDP and has to finance 50% of global social spending, it will have to work very hard to maintain its prosperity; each of us must stop spending more than we earn.” Today we can say: he was wrong. There Germanydue to the rigor, has been in for three years recessionhas decided to take on debt even though in German it is synonymous with guilt and has to choose: either cut welfare or not emerge from the crisis.
Which the Germans, masters of Europe, have determined with the green religion imposed in Brussels by traffic light government of Berlin: Social Democrats, Christian Democrats and Greens. They are the same ones who maneuvered 15 years ago, aided by George Sorosit spread to “eliminate” that Italian that Merkel e Nicolas Sarkozywho later ended up in legal trouble, laughed.
Perhaps the evil of the EU is Berlin which never wanted to make either common debt or community investments and has imposed the Green deal. Yet another German, Eric Heymannsenior analyst at Deutsche Bankhad warned: «In the automotive sector alone in Germany the Green deal will cost 840 thousand jobs. Without an eco-dictatorship,” he wrote in 2021, “it won’t work. There will be parties that will oppose a policy of strict climate protection if it leads to sharp increases in energy prices or interference with freedom of choice and property rights. Such parties will find support, and could contribute to a further division of the EU.” Merz already a year ago at the congress of Cdu in Lower Saxony he declared: «Welfare as it exists is no longer financially sustainable. And yet, under my government, there will be no increase in income tax for small and medium-sized businesses; I will not let myself be irritated by words such as social dismantling, drastic cuts and what follows from them.”
The social security ax in 33 points and the electoral nightmare of the East
Likewise, the chancellor has taken control of migration policies. First of all – and this closely relates Berlin to Rome – they changed the citizen’s income. Now it’s the minimum income which is worth 563 euros per month, but is lost if you don’t relocate. The ones receiving the check are 5.5 million, but i mass layoffs they could increase the bill.
The second maneuver concerns pensions. It’s one reform divided into 33 points. The salient fact is that you will no longer leave your job at 63. There is an obligation of one supplementary pension (managed by the public, but inspired by American pension funds) funded with a 2% increase in contributions paid by the worker. It will no longer be possible to leave your job even if you have 45 years of contributions beforeretirement age. If you do so you pay a penalty.
The pension will also become compulsory for self-employed workers, parliamentarians and members of the boards of directors of spas. They will have to pay contributions to the public pension system. Those who – doctors, lawyers, architects – already have a professional fund are saved. Self-employed people who start working now will have to register with the public system, those who already work can avoid it. Germany spends 185 billion euros to supplement pensions Merz it doesn’t fit. For the chancellor it is a disastrous transition: the harshest opposition comes from the East which is also the largest reservoir of votes for Alternatives for Germany. The three presidents of Saxony, Saxony-Anhalt And Thuringia they oppose the abolition of the pension after 45 years of contributions and a substantial part of the reforms.
The passage is very narrow for the chancellor. Because on September 6th we will vote in Saxony-Anhalt and the polls say that Afd is close to 40%, even according to these findings SPD and Greens risk not exceeding the threshold of 5%. Elections are also scheduled for September 20th in Berlin and the polls there indicate a sort of draw between Linke – which is the anti-SPD left led by Ines Schwerdtner and from Calabrian-Germanic Luigi Pantisano – given at 21%, CDU at 19% is almost equal to Afd indicated by 18%.
The crackdown on reception and the break with Brussels
In fact, Berlin would have a “non-government”. Merz he tries to regain consensus at the last minute on two fronts which also alienate his relations with the social democrats: on immigration and on taxes. For theimmigration Germany spends no less than 50 billion a year. Now there has been a further crackdown on reception, in accordance with the new European policies hubs are being planned outside the borders because Berlin wants repatriate approximately 300 thousand asylum seekers.
The crackdown also affects cash transfers to Landwho must try to deal with emergencies with their own funds and also refugees from Ukraine today in Germany have to give up double protection – they cannot remain registered in two EU countries and if they choose Berlin they must submit to the ordinary rules – just as Ukrainian males between the ages of 23 and 60 no longer receive protection status. Migrants’ cash benefits are also being withdrawn; there will only be a reception of food, accommodation and healthcare.
As for taxes Merzwhich is engaged in the extraordinary effort of rearm – 110 billion have already been allocated, investments of up to 900 billion are planned -, does not want to increase taxes and even if the Minister of Economy (Germany is operating coal power plants) Katherina Reiche has opened up to debt and deficits there is some concern about the accounts. Five hundred billion euros in new loans, added to the already planned annual deficit of 3.3% of GDP, should rekindle the economic engine over the next decade, but for now the German economy remains sluggish.
THE’Institut für Weltwirtschaft of Kiel led by the economist Moritz Schularick estimates the increase in GDP in 2026 at no more than 0.5%, which will also be generated only by public demand. This is why Merz so much Ursula von der Leyenyour party partner, as for the European Commissioner for the Economy, Valdis Dombrovskisresponded harshly to the idea of an EU budget expanded to 2 trillion and, above all, to European supertaxes to provide the Commission with 400 billion of its own resources.
On the budget, Europe is facing a very tough clash, but if in the times of Merkel Germany preached rigor today with Merz Berlin preaches: everyone thinks of their own home. Because of taxes he doesn’t want to hear it.
