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Olaf Scholz Assures: No Cuts to German Welfare State Amid Budget Crisis

Chancellor Olaf Scholz of Germany has firmly opposed proposals to cut social benefits as a measure to address a €60 billion budget deficit, asserting that the welfare state will remain intact despite fiscal pressures. Scholz's stance, announced during a speech at the Social Democratic Party (SPD) convention in Berlin, reassured his party but puts him at odds with the Free Democratic Party (FDP) coalition partners, who favor benefit cuts as a solution to the financial shortfall. While FDP's deputy leader Johannes Vogel has criticized the complexity of the German welfare system, especially regarding family benefits, Scholz did not offer detailed plans on how to resolve the budget issue in his 45-minute address.
Complications for the Chancellor are mounting. On the second anniversary of his coalition government, his popularity has plummeted to a historic low of 20 percent, as reported by the ARD public television poll. The budget predicament, exacerbated by a constitutional court ruling invalidating the repurposing of €60 billion from a pandemic fund for environmental projects, has been a factor in Scholz's declining approval.

In his speech, which also referenced Germany’s stance in support of Ukraine, Scholz did not comment on the possibility of reforming the country's strict borrowing rules. While SPD delegates back a reform to the debt limitation to ease the budget crisis, the idea remains contentious within the ruling coalition.
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