Debate over German Priorities: Armament vs Social Benefits

Recently, the German coalition has entered into a vigorous debate revolving around the financing of the German Bundeswehr exclusively from the general budget beginning in 2028. This is part of the plan proposed by Chancellor Olaf Scholz, a member of the Social Democratic Party, or SPD. The Free Democratic Party, or FDP, has responded by calling for a freeze on social spending at the very least. This demand has been met with staunch opposition from SPD chairwoman Saskia Esken and leaders of the Green parliamentary group, who view it as an attack on social systems.

Proposed tax on the wealthy

In response to the FDP’s demand, SPD’s Esken reiterates her party’s idea to impose heavier taxes on the wealthy. Esken told the Funke media group that the Social Democrats are not prepared to curtail social security for families with children, trainees and students, or pensioners just to fund necessary defense spending. She added that Germany is a rich country with many very rich citizens who can, and sometimes are willing to, contribute more to the common good. The VdK social association echoed Esken’s sentiments, calling for increased tax revenue and a reinstatement of the wealth tax.

Green party leader Britta Haßelmann expressed skepticism about Scholz’s proposal. She told the South German newspaper that each department’s savings quotas would not be enough to achieve necessary defense funds. She suggested looking into other options such as special funds or investment companies for long-term investments.

“Identify subordinate areas”

FDP chief budget officer Otto Fricke insists on making savings. He told the Rhenish Post that stabilizing the budget would require identifying subordinate areas. He explained that social benefits made up the largest expenditure in the federal budget, accounting for around 46 percent of total expenditure in 2024. Fricke stressed the importance of preventing any further increase in social benefits’ share and avoiding new benefits to secure enough room for an urgently needed economic turnaround. FDP parliamentary group leader Christian Dürr told the Funke media group newspapers that a new tax was unnecessary.

Special funds

Following Russia’s attack on Ukraine in 2022, the German government established a 100 billion euro special fund to enhance the Bundeswehr’s defense capabilities. This year, Germany can meet its NATO obligation to invest two percent of its economic output in defense for the first time in several decades. Chancellor Scholz assured in a video message that this commitment would persist in the coming years and decades. However, the special fund is set to expire in 2027. Scholz told the South Germans that from 2028 onwards, the general budget would be used to meet the two percent target.

Avoiding societal divide

Bundestag President Bärbel Bas warned against setting defense and social spending against each other. The SPD politician told the Funke media group that although the Bundeswehr needs to be better equipped, other important issues such as social justice, educational equality, infrastructure, and the ecological transformation of industry should not be neglected. Bas warned that prioritizing one over the other could risk causing societal divisions.