David McAllister MEP: The German Federal Budget

Somehow the coalition in Berlin has now reached an agreement after all. At the last minute, the last hurdles were cleared so that the Bundestag and Bundesrat could receive the draft for the federal budget for 2025 on time. 12 billion euros still have to be saved in the budget implementation, more than ever before. 9 billion euros is a realistic upper limit, the Federal Minister of Finance declared just a few days ago. The Federal Government itself apparently assumes that this self-proclaimed „progressive coalition“ will end at the latest with the federal election on 28 September 2025.

But what „progress“ can we still expect from this coalition? The bloating of the public sector alone is progressing apace, starting in the ministries themselves, continuing with the unmanageable number of federal government „commissioners“ for more or less every area of life, right down to the subordinate authorities. The Federal Government takes great pride in the fact that employment levels in Germany are higher than ever before. That’s true, but the government is not mentioning that without the public service, the number of employees would be falling.

Job cuts are continuing at a rapid pace, especially in the manufacturing sector; more than 300,000 jobs have been cut in industry since 2020. Job cuts are happening faster than the demographically-driven decline in the workforce, which is why unemployment is rising. A shortage of skilled workers and rising unemployment are contradictory manifestations of our labour market, even at first glance. They are the result of an interventionist economic policy that is moving further and further away from market economy principles and getting ever closer to a planned economy.

And we are now seeing the consequences of an erratic support policy for all kinds of industries that is no longer following any logic, as well as an expansion of transfer payments with the so-called „Bürgergeld“. This is sending completely the wrong signals to the labour market.

A „jolt“ must go through Germany, as former Federal President Roman Herzog said back in April 1997. He could not have imagined the additional challenges that Germany and Europe would face a quarter of a century later. The next German government must therefore not only make up for the decisions that were missed in recent years. Above all, it must show the German people a perspective on how we can remain a prosperous industrial nation.

Opening up the opportunities for this is not that complicated – provided we return to the principles of the social market economy, reduce the level of regulation in our labour market and, above all, work to ensure that people enjoy getting involved and achieving something again.