Labor Leaders Threaten Action as Government Pushes Through Austerity Measures
Germany’s two largest trade unions, IG Metall and Verdi, are warning of imminent industrial action if the federal government proceeds with planned cuts to social programs, including healthcare, elder care and pensions. They are also vehemently opposing proposals to erode the legally mandated eight-hour workday, a move currently under consideration within the governing coalition.
“The vast majority of citizens reject cuts to the social state” stated Verdi leader Frank Werneke in an interview with Süddeutsche Zeitung. The unions contend that proposed reforms risk undermining the safety nets for the most vulnerable, effectively depriving them of basic necessities. IG Metall chief Christiane Benner echoed this sentiment, characterizing the government’s impending program of reforms, dubbed the “Autumn of Reform” as an “Autumn of Cruelties.
The union leaders, representing a combined membership of approximately four million workers, directly challenged assertions made by Chancellor Friedrich Merz (CDU) regarding the alleged unsustainability of Germany’s social system. They argue that expenditures on unemployment benefits and citizen’s income recipients, when measured against the nation’s economic output, are not disproportionately high compared to two decades prior. Furthermore, pension expenditure has actually decreased over that same period.
Instead of austerity, the unions are proposing alternative financing models for the social state. Benner specifically highlighted the need for a rigorous examination of spending within the pharmaceutical industry, medical professions and hospitals. Werneke suggested a reduction in the value-added tax on pharmaceuticals to seven percent and a compensation mechanism for health and care insurance funds covering non-insured services – a measure potentially providing at least €20 billion in relief for employed individuals subject to mandatory insurance.
Simultaneously, the unions are advocating for a more equitable distribution of the tax burden, calling for increased contributions from high-net-worth individuals. “A wealth tax for the super-rich is overdue” Benner asserted, emphasizing the need for a reform of inheritance taxes targeting the wealthiest estates.
Criticizing the CDU/CSU’s approach to citizen’s income reform as lacking compassion, Werneke condemned the Union’s insistence on austerity measures without consideration for the impact on vulnerable populations. He pointed specifically to the detrimental effects on individuals battling mental health issues and single-parent families, highlighting the devastating consequences of cutting housing allowances amidst soaring rents, a policy he predicted will inevitably result in increased homelessness. The looming reforms, they warned, risk fracturing the social fabric of the nation and disproportionately impacting those least able to absorb the changes.