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Steinmeier Urges Swift, Careful Overhaul of Welfare System as Cities Sound Fiscal Alarm

Municipal deficit projections intensify pressure on the government’s reform commission to produce actionable proposals quickly.

Overview

  • At the Deutscher Fürsorgetag in Erfurt, President Frank‑Walter Steinmeier called for effective reforms that are implemented fast and cautioned that a social‑state overhaul cannot be done "with a chainsaw."
  • The Deutscher Städtetag warned of a record municipal shortfall in 2025 of more than €30 billion, possibly €36 billion, after a combined €24 billion deficit in 2024.
  • City leaders said the main cost drivers are child and youth welfare, integration assistance for disabled people, nursing support and daycare, noting that Bürgergeld is not the primary factor.
  • CDU general secretary Carsten Linnemann welcomed Steinmeier’s intervention and pressed for rapid steps to eliminate disincentives and combat misuse, increasing pressure on the coalition.
  • Municipal officials urged centralizing non‑discretionary tasks such as parental allowance, housing benefit, BAföG and vehicle registration, expanding digitalization to reduce duplicate applications, and raising cities’ share of value‑added tax.