The crisis in Germany is fueling a sense of abandonment and anger. The major parties are taking advantage of the situation, reacting as usual by going down the wrong path. It is essential to divert attention from the crisis profiteers and sell neoliberal myths as a solution, once again. The CDU, which is likely to put Friedrich Merz as the next chancellor, is trying to do so with a radicalized new version of the 2003 Hartz laws: “Agenda 2030” is on the cards.
The CDU’s Bundesvorstand recently adopted the Agenda paper, which can be summarized as follows: tax cuts mainly for the wealthy, penalties and cuts for the poor, and more pressure on low-wage workers.
The title is a deliberate reference to Schröder’s “Agenda 2010” as Merz himself acknowledged. With this neoliberal project, which was also supported by the Union and the FDP, the government created a massive low-wage sector in Germany. It forced the unemployed to accept miserable wages by imposing harsh sanctions, and set the tone for a culture of fear, where employees were forced to accept poor working conditions.
The result was a doubling of the capacity of food banks, a surge in the number of homeless, and a likely increase in crime.
Steuergeschenke for the big capital
Merz praised the core of what Schröder did 20 years ago, ignoring the negative consequences. The CDU aims to “relieve” big companies and the “middle class.” One wonders who Merz means by “middle class” when he, as a millionaire, has already self-identified as a member of that class.
A sweetener for employees with middle incomes up to around €6,700 a month is prepared: the top tax rate will only apply above €80,000 a year. This would primarily benefit those who are closest to this upper limit.
The CDU also wants to encourage retirees to continue working by making their side income up to €2,000 a month tax-free. This distracts from the fact that many have no choice but to work part-time because their pensions are so low. And the CDU also wants to exempt paid overtime from taxation. What it fails to mention is that half of all overtime is unpaid – around €775 million in 2023.
Gifts for big capital
The planned gifts for big capital are more lucrative. The formal tax liability of corporations will be reduced from around 30 to a maximum of 25 percent. This includes the corporation tax, the capital gains tax, and the solidarity surcharge. The CDU also wants to reduce the corporate tax from the current 15 to 10 percent. This would primarily benefit large corporations, while small businesses and private companies would be largely left out.
PR campaign against the poor
The CDU’s proposals will naturally reduce state revenue. The Institute of the German Economy (IW) estimated that they would reduce it by around €90 billion. The CDU wants to cut the basic allowance and social assistance: harder penalties for rejected “job offers” stricter rules for what is considered a reasonable workload, and the removal of all benefits for those deemed “total refusers.”
Behind this lies a lot of propaganda and little truth. Even job centers confirmed during the already long-running campaign against supposed “scroungers” that the number of those labeled as “total refusers” is low, and that many with mental or physical disabilities are among them. And, in any case, in 2024, the state spent around €37.6 billion on the basic allowance. This is less than half the estimated state revenue shortfall.
Neoliberal myths instead of more common good
With simultaneously planned plans for massive state expenditures on the new German Zeitenwende rearmament program, the Merz agenda can only make the disaster even worse for the majority of the German population. Not only will the social state be shrunk in the direction of American conditions, but also there will be no money for urgently needed investments in housing, healthcare, and the maintenance of infrastructure like roads and bridges.
Some CDU members of the Bundestag, state, and local levels saw Merz’s paper with a critical eye. Their doubts were attempted to be dispelled by the chancellor candidate in a discussion round: the companies would earn more profits through tax cuts, he assured. This would lead to a boom in the economy, which would then increase state revenue. Nothing new from the neoliberal repertoire: one has to believe in it very strongly.
According to the latest ZDF election barometer, the CDU currently has around 30 percent of the votes, followed by the AfD with 21 percent. The AfD also wants to reduce the rich man’s taxes and increase military spending. The CDU accuses it of writing off the CDU – which is probably true. Everyone, including the SPD, FDP, and Greens, knows this well: in crises, going down the wrong path usually brings the most votes – the election campaign is running.