Ifo Chief's Proposal to Abolish Elterngeld Sparks Debate Over Family Policy and Budget Priorities

Clemens Fuest's call to cut Germany's parental allowance to fund defense spending faces criticism from policymakers and social advocates.

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.