Increased economic growth may lead to broader savings in the citizen's allowance - Increased economic growth yields greater potential for reducing public expenditures
In an interview, Olaf Scholz, the leader of Germany's Social Democratic Party (SPD), has pledged to implement far-reaching reforms of the welfare state. The aim is to modernise the system, making it more efficient and cost-effective through digitalization.
Scholz criticised the current state of the welfare state, describing it as cumbersome, bureaucratic, and inefficient. He expressed concern over the lengthy and inefficient process of submitting applications at town halls, often resulting in repeated requests for incomplete documents.
The SPD leader believes that by making the administration more efficient through digitalization, enormous costs can be saved. Scholz sees significant potential in the area of digitalization for the welfare state, but did not discuss specific savings or digitalization strategies in this interview.
Internal disputes within the federal government have also contributed to the negative image of the welfare state, according to Scholz. He admitted his own share of responsibility in these disputes.
Scholz did not express support for the idea that the welfare state cannot be financed, but he used the term "bullshit" in opposition to a statement by Federal Chancellor Friedrich Merz that the welfare state in its current form cannot be financed.
Instead, Scholz emphasised the need to focus on democratic forces rather than chasing after the AfD. He warned against aligning with the AfD's themes in an attempt to rein in the party, and expressed concern that ignoring democratic forces could lead to them becoming a minority, as observed in countries like Italy and the USA.
Scholz's reforms are also aimed at reducing costs in the welfare state through administrative efficiency. He believes that by making the administration work more efficiently, he can save time and resources, and ensure that the state works effectively for its citizens.
Elsewhere, Kyriakos Mitsotakis, the Prime Minister of Greece, announced comprehensive tax relief measures financed by strong economic growth and budget surpluses. The measures include lowering tax rates for all income classes and benefiting families, particularly those with children.
Scholz's commitment to far-reaching reforms of the welfare state and his focus on digitalization and administrative efficiency are sure to be a topic of discussion in the coming months as Germany prepares for the next federal election.
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