Angela Merkel identified the climate and digitalization as the two great challenges facing Germany as she offered a spirited defense of her government record. The chancellor hit a number of familiar notes in her half-hour speech in the Bundestag, calling for more European Union engagement in foreign policy, a reinforcement of the social market economy, and more engagement against the rise of hate and intolerance in society.

Multilateralism remained her watch-word throughout, especially on how Europe should "leave a larger footprint" on world affairs. One of the pressing issues at the moment, she said, was rescuing the Iran nuclear deal, which the US has pulled out of. "That is a European task," she said.

Multilateralism, as well as the social market economy, were also her proposed solutions to the climate crisis, which she said the German government considered a "challenge for humanity."

"We must make this fundamental decision together," she told parliamentarians. "Whether we take responsibility or not. We also need to make the basic decision whether we want to take the risk and say it wasn't caused by humanity, and maybe it will all pass, or whether there is so much evidence that we have to take responsibility in view of future generations."

Digital catch-up

She also insisted that, despite consistent complaints about Germany's digital infrastructure, the government was moving forward rapidly. "We have to develop a strategy of how we provide blanket coverage, including for farmers and many others, to have access to broadband internet," she said. "We have to become better, faster, and keep up in the area of artificial intelligence. We have developed a strategy and invited internationally recognized professors to come to Germany to work."

The lower house of parliament was packed on Wednesday morning for one of the highlights of the parliamentary year: the general budget debate, when tradition demands that the chancellor defend the government from attacks on every point of policy from across the entire political spectrum.

But Merkel's government was under particular pressure at this year's debate, 10 days after regional elections in Saxony and Brandenburg showed a further erosion of support for the two centrist parties that make up her coalition: her own Christian Democratic Union (CDU) and the center-left Social Democrats (SPD).

AfD attacks Merkel

Those results gave extra ammunition to the biggest opposition party, the far-right Alternative for Germany (AfD), whose co-leader Alice Weidel opened proceedings with a comprehensive attack on the government's politics, accusing Merkel's administration of "deindustrializing" Germany in the name of a "green-leftist ideology" based on "climate madness."

Weidel's main target was the government's ongoing "energy transition," an attempt to shift to renewable energy sources away from both fossil fuels and nuclear power.

"Your alleged climate protection is nothing more than a monstrous deindustrialization program combined with veritable job destruction," Weidel said. "You waste billions to avert imaginary doomsdays in the distant future."

She reserved similar condemnation for plans to see the car industry move towards e-mobility, which she said showed the government was attempting a "planned economy."

AfD: 'State water-taxi service' for migrants

Weidel, whose party is primarily known for its anti-immigration stance, also condemned Merkel's plans to implement a new sea rescue mission in the Mediterranean. She accused Merkel of creating a "state water-taxi service" for migrants from Africa.

In response, Merkel called for more action against hate and intolerance while at the same time addressing increasing social and economic polarization.

"We know that in Germany people have concerns, that people feel left behind, that development between the town and the country are very different," Merkel added. "We need to find answers to that."

"Every day we witness attacks on Jews, attacks on foreigners, violence and hate speech," she said. "We have to fight against that. And we can distribute as much tax money to important projects as we want," she said. 

"As long as it is not clear that in this country there is zero tolerance for racism, hatred and aversion to other people, a proper coexistence is not possible."

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