Scholz dampens hopes for significantly higher defense budget

Scholz dampens hopes for significantly higher defense budget

German finance minister olaf scholz (SPD) has dampened hopes that the defense budget could benefit greatly from the additional revenue forecast in the tax estimate.

"We are investing the ten billion euros for the next five years primarily in the expansion of the digital network and to relieve incomes that are suffering from the cold progression," he told the newspaper "bild am sonntag". "Of course, by the time we get all this done, there won’t be too much of the extra revenue left over for the defense budget, development aid and other coalition projects."

Defense minister ursula von der leyen, with the support of chancellor angela merkel (both CDU), is calling for a much larger increase in the size of the bundeswehr than previously planned. In the coalition agreement, the CDU/CSU and SPD had agreed to prioritize additional funds that would be freed up for the armed forces and development policy. Defense budget already second largest item in federal budget. Scholz had rejected von der leyen’s demands, but had held out the prospect of higher spending on the federal armed forces after the tax estimate – without, however, naming an amount.

According to scholz, the planned reduction in contributions to unemployment and health insurance will relieve the burden on citizens by ten billion euros. "We will reduce the contribution to unemployment insurance for everyone, and we will make sure that the employers will again pay half of the health insurance contributions. The two resolutions will bring almost ten billion euros to the burghers," scholz told the "bild am sonntag" newspaper. In the coalition agreement, the SPD and the CDU/CSU agreed to lower the contribution to unemployment insurance by 0.3 percent, and health insurance contributions will once again be paid by employers and employees on a parity basis starting in 2019.