Investing in security and new horizons for Germany

Federal Chancellor Scholz addresses the Bundestag Investing in security and new horizons for Germany

Even in Germany the effects of the war in Ukraine can be felt every day. Energy and food prices are rising. In his government statement, Federal Chancellor Scholz explained how the burden would be eased for citizens. He also pledged further support for Ukraine, including the latest air defence systems. The Federal Chancellor's speech – a summary.

Federal Chancellor Olaf Scholz speaks at the podium in the Bundestag.

In times of rising energy and food prices, the Federal Government is easing the burden on citizens, stressed Federal Chancellor Scholz in the Bundestag.

Photo: Federal Government/Steins

“Every day, millions of citizens ask themselves, can I get by on the money I have? Will it last till the end of the month?” said Federal Chancellor Scholz in his budget speech to the German Bundestag. These were serious questions, he said, and clear answers were needed. Scholz explained how the Federal Government planned to ease the burden of rising prices for citizens, with measures amounting to over 30 billion euros.  

  • The commuter tax allowance is being raised, backdated to January.
  • The Renewable Energy Sources Act levy will be abolished in July to reduce electricity bills.
  • Heating cost subsidies will be expanded from July to people on low incomes, recipients of housing benefits and students receiving Federal Training Assistance Act (BAföG) funding.
  • The child bonus and immediate subsidy will benefit children and young people affected by poverty.
  • All those in employment will receive a one-off payment of 300 euros to compensate for increased energy costs.
  • June will see tax reductions on petrol and diesel and the introduction of the 9 euro ticket.

“This relief is coming in now, and over the coming days and weeks,” Scholz stressed. The Federal Chancellor explained how the Federal Government had created a protective shield consisting of subsidies, guarantees and affordable loans. 

“Pensioners will also benefit from these relief packages”

The Federal Chancellor stressed that pensioners would also benefit from lower electricity bills, the fuel discount and the 9-euro ticket. He added that, from July, pensions would rise to a level not seen in decades, increasing by 6.12 percent in the East and 5.35 percent in the West.

Concerted action with social partners

“In everything we are doing now and will do in future, one thing is clear: long-term subsidies funded through borrowing are not a solution,” warned Scholz, who expressed his expectation that the Federal Government would return to compliance with the debt limit imposed by the constitution. The aim must be, he said, to mitigate inflationary pressures in the long term.

“We need a targeted effort in a wholly extraordinary situation,” Scholz said, pledging that the Federal Government would bring together employees, employers and trades union to take concerted action. The aim was to work together to find solutions that would make it possible to get around currently rising prices.

“On the verge of a second industrial revolution”

Scholz noted that fair wages were one such solution, but that many citizens were asking more fundamental questions, such as how safe is my job if energy is becoming more expensive while supply chains are becoming less secure? What happens next for Germany as an industrial nation? “We all know we are on the verge of a second industrial revolution,” Scholz said, stressing that two factors were critical in this:

  • Supply security, where Germany would have to end its dependence on Russian gas, such as by building four new LNG terminals, developing new sources of supply and promoting hydrogen as a source of energy.
  • Massive expansion of renewable energies: here the Federal Government had already passed its Easter package of measures, he said. Two further packages would follow in summer and autumn, Scholz said.

Putting citizens’ concerns and expectations first

Scholz pledged that the Federal Government would put citizens’ concerns and expectations at the heart of its policies. “People’s greatest concern at the moment is without doubt the terrible war that Russia has started against Ukraine,” said the Federal Chancellor.

“We all feel sympathy with the victims of this criminal war,” said the Federal Chancellor, who noted that the war had now been going on for almost 100 days, and “the number of victims rises with each passing day.”

“Putin cannot be allowed to win this war, and he will not win it”

Scholz stressed that President Putin could not be allowed to conquer all or part of the country by means of a brutal military operation. “It's imperialism, and we will not accept it in Europe,” the Federal Chancellor said.

In his address to the Bundestag, Scholz also spoke about deliveries of arms to Ukraine. “We are sending constant deliveries and have done so since this war began. Immediately after war broke out we took this decision, overturning years of state practice in Germany.”

With regard to Germany’s arms deliveries, Scholz made it clear that “Germany has nothing to hide.”

A summary:

  • A few days after war broke out, Germany sent deliveries of air defence missiles and anti-tank weapons.
  • Since then over 15 million rounds of ammunition, 100,000 hand grenades and 5,000 anti-tank mines have been supplied.
  • Large quantities of explosives and machine guns have been sent along with dozens of lorryloads of materials for drone defence, mobility, communications and supplies to care for the wounded.
  • At the request of Ukraine, Germany worked with Denmark to supply 54 modernised armoured troop transports.
  • Over the next few weeks, Germany will work closely with the Netherlands to supply twelve of the most advanced self-propelled howitzers in the world.
  • Ukraine has signed a contract with the arms industry to supply Gepard armoured anti-aircraft vehicles. Training takes around three weeks and will get underway in the next few days.
  • On a visit to Brussels, Federal Chancellor Scholz agreed with Prime Minister Mitsotakis of Greece that Greece would supply Ukraine with infantry fighting vehicles from the former East German army and Germany would restock Greek inventories with German infantry fighting vehicles.
  • The Federal Government has also recently decided to supply the IRIS-T system, the most modern air defence system Germany possesses.
  • In addition, Germany will supply Ukraine with a highly advanced counter battery radar system that can locate hostile howitzers, mortars and rocket artillery units.

Multi-billion investment in the Federal Armed Forces

The Federal Chancellor warned of the need to make good on earlier failings affecting the Federal Armed Forces. Scholz said the aim of the 100-billion-euro special fund was to create a “powerful and advanced Federal Armed Forces.” The Federal Chancellor this would create “what is likely to be the largest conventional army in the European NATO system”, adding: “This is the right response to this new era we have entered!” 

“In these uncertain times we are ensuring safety and security with our 2022 budget and the Federal Armed Forces special fund, and also setting a new course for the future,” stressed the Federal Chancellor.

Expenditure is being planned by the individual ministries.