German Chancellor Olaf Scholz on Wednesday defended his government's pension plans in its 2025 budget proposal, while his defence minister faced hard questions over funding for the military.
"The fact that we want to guarantee a stable pension level in Germany is one of the major plans of this government," said Scholz during the debate on his coalition's proposed budget in parliament.
Opposition leader Friedrich Merz of the centre-right Christian Democrats (CDU), however, blasted the budget and accused Scholz's government of damaging the free market.
"The social budget is exploding," Merz charged during the debate in Berlin.
Merz contended that Scholz's coalition has broken any consensus between older and younger generations, and is making social policy unilaterally on the backs of younger citizens who will have to pay the bill.
Only strict limits on deficit spending backed by the CDU have prevented "an explosion in national debt" under Scholz's government, Merz claimed.
"You are worsening the competitive conditions for the German economy with every decision you make in your coalition," Merz said. "We are moving more and more in the direction of a planned economy."
The chancellor, however, championed pension commitments in the budget, saying that 17-year-olds in the country, who are now leaving school and will be paying pension contributions for five decades, need to know what they can rely on in the future.
"The most important asset that many in our country have is their pension entitlement, their pension insurance," he added.
Scholz also promised to do everything in his power to support families and to push ahead with the expansion of all-day childcare and daycare centres.
The government is spending billions of euros on those efforts, he said.
The chancellor further emphasized that he wants to offer senior citizens people more flexibility by allowing them to work into older age if they so desire.
Clash over defence spending
Later on Wednesday, the government and opposition clashed in debates over funding for Germany's military, which increased modestly but fell far short of what Defence Minister Boris Pistorius had requested.
Ordinary spending on defence rose by only €1.3 billion ($1.4 billion) in the 2025 budget, reaching €53.25 billion.
The CDU's Johann Wadephul said the funding would be insufficient to rebuild Germany's Bundeswehr and live up to Scholz's 2022 pledge of a historic "turning point" in German defence policy in the wake of Russia's full-scale invasion of Ukraine.
Scholz's promise is turning out to be a "cheap cliché," Wadephul argued, with inflation meaning the military would in fact see a cut in real terms.
"You are taking funds away from the Bundeswehr instead of giving it the necessary resources," Wadephul charged.
In response, Pistorius said that further increases in defence spending beyond NATO's target of 2% of GDP would be necessary.
"2% must not be the target. It is the minimum if we take our security seriously in the coming years," the defence minister argued.
Pistorius waved away criticism from the CDU, which he said had failed to properly fund the Bundeswehr during its periods in office.
"If you had ordered frigates earlier, we would have a better-equipped navy today," said Pistorius. "You let the defence budget and defence monitoring bite the dust."
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