The 'bullshit' row over Germany’s social state

Germany’s coalition was trying to make up and get along... but then someone dropped an English swearword in reference to the chancellor.

A Job Centre in the town of Solingen. Source: Wikipedia Commons

Dear Reader,

For two days last week, the top leaders of Germany’s often-contentious coalition partners—the centre-right CDU/CSU and centre-left SPD—gathered in the picturesque Bavarian city of Würzburg for a retreat. Amid discussions on how to resolve conflicts and strengthen unity after the summer break, participants were seen sipping Franconian wine and strolling leisurely across the city’s bridges.

The positive powwow prompted CDU/CSU faction leader Jens Spahn to effuse about the “guter Geist von Würzburg” (good spirit of Würzburg). The phrase quickly became shorthand in the German media for renewed optimism and cooperation within the coalition, which got off to a rocky start amid persistent quarrels over taxes, social spending, and other key policy areas.

Attendees emphasised that they would mend their differences through dialogue rather than airing disagreements publicly. Yet that “Geist” appeared to vanish within days, when Chancellor Friedrich Merz of all people bluntly declared that the SPD’s beloved welfare state was a millstone around the country’s neck.

“Germany has been living beyond our means for years,” Merz declared at a CDU/CSU party convention. He proposed “painful cuts” to social security spending—including pensions, Bürgergeld (long-term unemployment payments), and long-term care—to balance forthcoming federal budgets.

“We simply can’t afford our current social system anymore,” Merz added.

The following day, Labour Minister Bärbel Bas (SPD) fired back, saying of Merz’s portrayal of a burdensome German welfare state: “I apologise for the language—(but that’s) bullshit.”

Bas continued to say that, while reform is necessary, a robust system for healthcare, pensions, and care remains vital for future generations.

Social cuts vs. tax hikes

The clash over social spending is part of a broader debate on how to stabilise Germany’s finances amid economic stagnation and demographic change.

Tensions are especially elevated amid a general economic downturn: the German economy shrank more than expected in the second quarter as US tariffs took a toll on exports, according to figures released last week. Newly released numbers also put unemployment at three million, the highest level in a decade.

Still, Bas has stood by her strong message to Merz. She told Stern magazine that she rejected welfare cuts “because we are a rich country. To say that we need to cut back the social safety net is wrong.”

“I think we now have a great chance to make our system stable for future generations,” Bas said. “We need to be creative and think outside the box, for example, when it comes to which professional groups could contribute to the costs.”

SPD Finance Minister Lars Klingbeil certainly has a clear idea of who should contribute more, recently proposing tax hikes on high earners to close a €30 billion gap in the budget.

But Merz shot the idea down. Speaking to broadcaster ZDF on Sunday, he ruled out higher taxes, arguing Germans simply needed to “work more and longer,” citing high sick leave, stagnant productivity, and elevated labour costs as threats to the economy.

Meanwhile Merz ally Markus Söder, Bavaria’s CSU premier, has even called for tax cuts, claiming they are key to boosting Germany’s competitiveness.

Are the ‘fat years’ over?

Merz’s warning echoes a phrase coined in 1980 by the German Economic Institute: ‘Die fetten Jahre sind vorbei’— literally the fat years are over— marking the end of an era of steady growth and fiscal surpluses.

The phrase has recently been revived by German politicians and economists who stress the same message. Economist Martin Werding told Der Spiegel on Tuesday that, if no spending cuts are made, the burden on social system contributors — workers and employers paying into Germany’s social insurance system — would have to rise to 47.5 percent by 2035 and nearly 53 percent by 2050.

That could overload the cost of labour, he said, making jobs in Germany too expensive for companies and leaving employees with too little take-home pay.

But the CDU and SPD remain divided on how exactly these cuts will—or won’t —occur.

For one hot button topic, the pension system, Germany is facing increasing strain from an aging population with more retirees—now up 7 million since 1993—and fewer contributors. To better cope, Merz has suggested that he’s in favour of adapting the retirement age to longer life expectancies, while the SPD has stood firm by the current pension limit.

Bürgergeld expenditures have also hit historic levels, with Merz pushing for the long-term unemployment payment scheme to be replaced by a “new basic security.” The new system would access assets more quickly if recipients have savings, and impose more sanctions on people who refuse work.

But the SPD has criticised the chancellor for not acting in the interests of the most vulnerable people in society.

A national bellwether

Merz in the meantime seems to have shrugged off Bas’ words. In comments made to the national media on Monday, he accused her of “putting things more dramatically in order to win approval.”

With local elections in North Rhine-Westphalia coming up on September 14th, parties are treating the vote as a bellwether. NRW, Germany’s most populous state, wields six votes in the Bundesrat (the upper house), giving it outsized influence over federal legislation.

Observers will watch out for Germany’s other “Geist”: whether the election signals public support for spending cuts, protecting the welfare state, or the rise of far-right politics.

Further reading:

• Why Germany's pension system is failing

• Does hard work still pay in Germany?

---

Result of our last poll: Was Merkel right to open Germany's borders to refugees in 2015?

• Yes - 39%

• No - 61%

---

News in Brief

• 🪖 Green light for military service — Germany’s coalition government controversially approved a draft bill introducing a military service scheme. Defence Minister Boris Pistorius (SPD) pointed out that the international security situation, especially “Russia‘s aggressive behaviour”, makes it essential to recruit up to 40,000 new soldiers per year. While participation in the scheme would be voluntary, all 18-year-old males would be required to complete an online questionnaire assessing willingness, physical fitness, and availability. Those who are picked out would then be required to attend a military medical examination. The law would also allow compulsory military service to be reinstated, but only with Bundestag approval.

• 🇮🇱 Berlin blocks sanctions on Israel — Germany has announced that it won‘t support the EU Commission’s proposed sanctions on Israel as a response to the humanitarian crisis in Gaza, arguing that they wouldn’t have any impact on Israel's political or military decisions. Foreign Minister Johann Wadephul (CDU) stated that it’s more effective to restrict weapons deliveries that could be used in Gaza—as Germany decided in favour of earlier this month—rather than curtail civilian scientific cooperation. But other EU countries warned the Bundesrepublik that rejecting the proposed sanctions, targeting tech start-ups in areas such as cybersecurity, drones, and AI, only undermines EU unity and its moral authority on the international stage.

• 🙀 Catcalling to be criminalised? — The SPD called on Monday for catcalling and verbal sexual harassment to be criminalised in Germany. Sonja Eichwede, deputy chair of the SPD parliamentary group, says such harassment intimidates women and girls, often forcing them to avoid public spaces. In Germany, verbal sexual harassment is generally not recognised as an offence. Countries like the Netherlands and Spain already have similar laws, with fines or prison sentences.

---

Members’ corner

---

Sincerely,

Rachel Stern

---

Are you interested in advertising on The German Review? Check out our information for advertisers here.