CDU Economic Council calls for social gifts to be withdrawn – Federal government in budget crisis

CDU Economic Council calls for social gifts to be withdrawn – Federal government in budget crisis

According to a report from www.welt.de, the CDU Economic Council is calling for the withdrawal of “social gifts” from recent years as a way out of the budget crisis. The Taxpayers' Association supports this demand and is calling for a hiring freeze in the federal administration and a construction freeze on various capital projects.

The withdrawal of “social gifts” would mean that state benefits such as citizen’s benefit and basic child benefits would be reduced or eliminated. This would have a direct impact on the recipients of these benefits, but could also dampen domestic demand as lower government transfers could lead to lower consumption. This in turn could put pressure on companies and the labor market.

A hiring freeze in the federal administration and a construction freeze for various projects would lead to a reduction in public spending. This would have an impact on the construction and service industries, as orders and jobs could be lost. On the other hand, a leaner and more efficient administration could lead to long-term cost savings.

The proposed measures could therefore put short-term pressure on the economy and the labor market, but in the long term lead to relief for the state budget. It remains to be seen whether and to what extent the federal government will respond to these demands and what specific effects the measures will have on the market and the financial sector.