Spending reductions called for intensely by Grimm
In an effort to address Germany's federal budget crisis, economist Veronika Grimm has proposed a series of drastic budget cuts and reforms, particularly focusing on the pension and social welfare systems.
Grimm's recommendations for pension insurance reforms include tying pension adjustments strictly to inflation rather than wage growth, adjusting the retirement age dynamically in line with increasing life expectancy, and abolishing expensive benefits such as early retirement schemes.
In the realm of maternity benefits, Grimm criticizes recent increases, arguing they exacerbate the budget strain without sustainable funding solutions. She calls for a reevaluation of the mother's pension to alleviate the financial pressure.
Regarding the widow's pension, Grimm advocates for ending the current model, which she views as financially unsustainable.
When it comes to citizens' income and federal financial aid, Grimm emphasizes the need for significant ministry-level cuts across social spending to contain expenses. In a broader context, she stresses the importance of spending cuts instead of tax increases to manage the budget deficit.
Grimm's proposals aim to make pension entitlements more financially sustainable by linking benefits to economic realities, cutting costly privileges, and applying fiscal discipline through expenditure reduction rather than tax hikes.
Furthermore, Grimm has advised the federal government to cut its budget by up to 80 billion euros per year. This proposed reduction would affect various sectors, including climate protection subsidies and tax incentives, with the potential for significant savings in double-digit billion amounts.
Grimm's critiques highlight that maintaining current pension levels alongside expanding benefits like maternity provisions will drastically worsen fiscal pressure and labor expenses. She advocates for structural reforms to secure long-term financial viability of social welfare systems rather than increasing debts or relying on borrowing.
Finance reforms in business sectors, as Grimm suggests, should involve cutting budgets for climate protection subsidies and tax incentives, with the intention of reducing expenses by up to 80 billion euros per year. Grimm also proposes significant ministry-level cuts across social spending, particularly in maternity benefits, as a means to alleviate the budget strain, reevaluating the mother's pension to lessen the financial pressure.
