Merkel to cut social services in tight budget
Published on: 06 Jun 2010 12:41 CET
Chancellor Angela Merkel has called her government to meet on Sunday and Monday to decide on measures to reduce the federal budget by around €10 billion every year until 2016 in order to get control of debts.
As the meeting started on Sunday in Berlin, news magazine Der Spiegel reported that it had firm information that 15,000 civil servant jobs would be cut in an effort to save €800 million from the federal administration bill. News agency DPA reported the number was 10,000 but that those remaining would see their pay cut by 2.5 percent.
Other measures which Der Spiegel said were agreed included reducing parent allowances by €500 million, while other social provisions are said to no longer be protected from cuts.
Merkel said on Saturday that the relationship between investment for the future and social payments had to be newly balanced. “It will not simply be achieved if one keeps increasing the income, but must also happen in that one makes the structures of social security more efficient,” she said.
Savings of €2 billion should be achieved by allowing the federal work agency more room for making independent decisions about what benefits unemployed people receive – instead of being strictly bound to legal limits. This is expected to deliver up to €6 billion by 2014, Der Spiegel said.
Tax breaks for companies who are environmentally sound will be cut, although not for those companies competing on the international market, the magazine added.
And the Deutsche Bahn will have to pay €500 million into federal coffers each year.
Energy companies will also be tapped up for €2.5 billion a year in exchange for extending the running time of nuclear power stations.