Overview

• Clemens Fuest, head of Germany's Ifo Institute, has proposed abolishing Elterngeld, describing it as a 'nice-to-have' policy that is not a budgetary priority.
• Elterngeld, introduced nearly two decades ago, costs Germany approximately €8 billion annually and aims to support parents during early childcare while promoting gender equality.
• Critics argue that cutting Elterngeld would undermine family support systems and harm efforts to balance work and family life, especially amid labor shortages.
• Sweden, a pioneer of parental leave policies, faces its own debates about reforming its generous Elterngeld system, with concerns over misuse and fairness in benefit allocation.
• The proposal has sparked broader discussions on balancing social spending with increasing defense budgets, as Germany's government negotiates coalition agreements.