German Chancellor Olaf Scholz appealed to the country's democratic parties to unite in a concerted effort to modernize Germany, speed up bureaucracy and combat the current economic crisis.

Defending his government's proposed budget in front of lawmakers on Wednesday, Scholz announced what he dubbed a "Germany pact" for the good of the country.

He called on the opposition, local officials and state agencies to back his government's measures to kick-start the German economy — and also fend off the threat from the far right, which recent polls have shown is rising in popularity.

"The citizens are fed up with this standstill, and I am too," said Scholz, criticizing a "mildew of red tape, risk averseness and despondency" that he said has weighed down Europe's largest economy in recent years.

Scholz's government budget plans for 2024 foresee streamlined approval processes for infrastructure and construction projects and further digitalization of Germany's notoriously analog bureaucracy.

"We need a new national effort" to make Germany "faster, more modern and more secure," said Scholz, sporting a black eyepatch over one eye following a jogging accident and calling for: "Speed, not standing still; action, not hesitation; cooperation, not arguments."

Scholz criticizes 'demolition squad' AfD

According to Scholz, the "Germany pact" is not only necessary to reinvigorate Germany's ailing economy and modernize the state but also to fend off the growing threat posed by the far-right populist Alternative for Germany (AfD).

"The vast majority of citizens know that the self-proclaimed 'alternative' is in fact a demolition squad — a demolition squad for our country," he said, accusing the AfD, whose popularity hit 21% in recent polls, of aiming to benefit from the economic downturn.

Acknowledging that his three-party coalition government, which includes his own center-left Social Democrats, the environmentalist Greens and the business-focused Free Democrats, has "argued too much in recent weeks," he called on Germany's democratic forces to "counter those who want to make political profit from scaremongering or scenarios of decline."

According to the draft budget for 2024, introduced by Finance Minister Christian Lindner (FDP) on Tuesday, the federal government intends to spend €445.7 billion ($477.9 billion) next year, some €30 billion less than this year.

The government intends to offer record sums for investments, including €58 billion in climate-friendly mobility, the hydrogen economy and digitalization and €54 billion in new transport infrastructure, railways and bridges, including an extra €24 billion of investment for state railway company Deutsche Bahn over the next four years.

"This is the biggest program of investment in such a short period since the steam train," claimed Scholz.

Responding to criticism that countries such as the United States offers much greater subsidies to companies in IT chips and battery sector, Scholz insisted that, "in proportion to the size of Germany and our economy, these investments absolutely match up to the USA."

Opposition criticizes support for armed forces

Further criticism, led by opposition leader Friedrich Merz of the center-right conservative Christian Democrats, accused the coalition government of failing to meet the demands of the "Zeitenwende," the large-scale "turning point" that Scholz famously announced in the immediate aftermath of Russia's full-scale invasion of Ukraine in 2022.

In particular, Merz attacked the funding of Germany's armed forces, accusing the government of dipping into the €100 billion one-off special fund allocated to the Bundeswehr to meet NATO demands for 2% of state spending to go on defense.

"What we're seeing instead is an effectively unchanged state of affairs in defense," said Merz. "And the losers are our soldiers."

Scholz hit back, guaranteeing that NATO demands would continue to be met in 2028, 2029 and into the 2030s, even after the one-off special fund has been exhausted.

mf/sms (Reuters, dpa)

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