German Chancellor talks about instability in country's prosperity
German Chancellor Friedrich Merz spoke of the uncertainty in Germany's prosperity, amid slowing economic growth.
According to RIA Novosti on August 25, the Daily Telegraph reported that speaking at a regional party conference, German Chancellor Friedrich Merz said Germany could no longer afford to maintain its social welfare system.
“The social welfare we have today can no longer be sustained by the economic capacity of our country,” Mr. Merz was quoted as saying by the newspaper.
In addition, the German Chancellor emphasized that he will continue the policy of tightening immigration and developing measures to support businesses.
Germany's finance minister has argued for a fundamental reassessment of the welfare system as spending continues to soar past a record 47 billion euros by 2024.
Once Europe's top exporter, Germany's economy has lost momentum, slowing significantly since 2017, with GDP growing just 1.6% compared with 9.5% for the rest of the eurozone.
The German economy is set to shrink 0.2% in 2024, after shrinking 0.3% in 2023 – the first time since the early 2000s that the economy has contracted for two consecutive years.
Industrial production fell under the left-leaning "traffic light" coalition of the previous government, Olaf Scholz, and has continued to fall under the current government, with GDP falling 0.3% in the second quarter of 2025.
Meanwhile, spending on welfare has boomed and is expected to rise further this year as Germany's population ages and unemployment rises. While the majority of beneficiaries are German, a large number are foreign nationals.
