Germany Slashes Welfare State to Fund Rearmament

Germany’s coalition government has agreed a sweeping package of welfare cuts worth €38.3 billion by 2030, stripping back the country’s health system and pension guarantees to free up funds for military spending.

The Christian Democratic Union (CDU) and Social Democratic Party (SPD) — which form the governing coalition under Chancellor Friedrich Merz — reached the agreement ahead of a cabinet meeting on April 28, 2026. German media obtained the document before the official announcement.

The most contentious measure removes free health insurance coverage for non-contributing spouses. Under the new rules, spouses who do not pay into the statutory system will be required to contribute a minimum of 2.5 per cent of their partner’s insured income.