Germany’s conservative Chancellor Friedrich Merz has set up a battle with his centre-left coalition partners by declaring that Europe’s largest economy can no longer afford its generous welfare state.
“The welfare state as we know it today can no longer be financed by our economy — and that is why we have to change it,” he told members of his Christian Democrats (CDU) party in August.
A reform of Germany’s social security, which is part of the coalition’s agreement, comes as the country is launching a €1tn debt-funded spending programme to modernise its armed forces and repair its infrastructure.
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