In Heated Debate, Merz Warns German Prosperity Under Threat

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(Bloomberg) — Chancellor Friedrich Merz warned that Germany is facing a perilous watershed moment and vowed that his government will make the right choices to protect freedom, economic prosperity and social cohesion.

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In a speech to parliament setting out priorities for the ruling coalition of his conservatives and the Social Democrats, Merz pointed to military aggression, growing trade protectionism and anti-democratic forces at home and abroad as key threats to Europe’s biggest economy.

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“Our country stands at a milestone this fall,” Merz, who has promised an autumn of reforms to address Germany’s problems, told Bundestag lawmakers on Wednesday in a debate interrupted by shouting from far-right lawmakers, which prompted the parliament’s president to call for order.

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“We all sense that the decisions that lie ahead of us are not about details, but about fundamental issues,” the chancellor added. “It’s about the future of our country — how we live and coexist, how we work and earn money, and whether our values ​​will continue to endure.”

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Merz is under increasing pressure to make good on a pledge to pull Germany out of its lingering economic stagnation and address challenges like high energy prices and tangled bureaucracy.

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A massive increase in debt-financed spending on the armed forces and Germany’s decaying infrastructure, as well as a package of measures designed to boost short-term growth, are expected to underpin expansion next year.

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Domestic and geopolitical turmoil has fueled the rise of domestic populist forces and complicated Merz’s efforts to revive Germany’s prospects. Since winning February’s national election, his center-right CDU/CSU bloc has lost ground and is trailing the far-right Alternative for Germany party in some opinion polls.

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“Our cohesion is being openly questioned,” Merz said, referring to “political forces at home and abroad.”

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“They are disparaging our democracy, sowing discord, and seeking to divide our society — and this ruling coalition as well,” he added.

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Speaking before Merz as opposition leader, AfD co-leader Alice Weidel accused Merz of empty promises and symbolic politics on stopping immigration at Germany’s borders.

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“The autumn of reforms will be an autumn of empty words, leading to a winter of even higher spending,” she told lawmakers.

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Weidel also accused Defense Minister Boris Pistorius from the Social Democrats — Germany’s most popular politician — of “warmongering” because of Berlin’s decision to continue support for Ukraine in its defense against Russia’s military invasion. 

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“Instead of making the Bundeswehr operational again, he is playing the war minister and linking the debate on conscription with the enemy image of Russia,” Weidel said.

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Merz admitted that Germany’s social welfare system could only be preserved if the economy returned to growth. “A new economic dynamic is the prerequisite for the future financing of social services,” Merz warned.

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“We cannot keep our social promises by taking as much as possible from the few, no matter how rich they may be” the center-right leader said. “We can only keep our social promises if we can all develop our full potential and be creative – and in this self-realization, earn the means we need for our solidarity. For me, this is also part of a new consensus on fairness.”

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(Updates with comments from AfD lawmaker beginning in 10th paragraph)

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