German Chancellor Olaf Scholz speaks during a plenum session of the lower house of parliament, Bundestag, for a general debate on the Federal Government policy in Berlin, Germany September 6, 2023. REUTERS/Annegret Hilse
BERLIN (Reuters) -German Chancellor Olaf Scholz on Wednesday called on the ruling coalition, democratic opposition and local authorities to pull together to overcome the "mildew of red tape, risk averseness and despondency" that has spread across Europe's largest economy in recent years.
"The citizens are fed up with this standstill, and I am too," Scholz said in a speech to the Bundestag lower house of parliament during a session on the 2024 budget, sporting a black eye patch following a jogging accident.
The chancellor announced a new "Germany pact" with a bundle of measures aimed at streamlining the country's notoriously slow bureaucracy and speeding up the digitalization of the economy.
"Citizens want orientation, courageous compromises," Scholz said. "That is my demand of us all: the government parties that have argued too loudly in recent months and also the democratic opposition."
This was also key, he said, to fend off "those who want to draw political profit from decline scenarios and panic-mongering" in reference to the far-right party Alternative for Germany (AfD), which has surged in polls over the past year to second place, well ahead of Scholz's Social Democrats (SPD).
This "so-called alternative" was in reality a "demolition commando" for our country, he said in unusually harsh terms.
The chancellor rejected the idea of a new stimulus package to boost an economy that stagnated in the second quarter after a winter recession as it battles high inflation, financing costs and a drop in exports.
The government was already investing record sums in the economy, he said. The 2024 budget foresaw it investing 58 billion euros from its climate fund in hydrogen, the chip industry, climate-friendly mobility, digital infrastructure and building renovation.
It was also investing 54 billion euros from the regular budget in railways, new bridges, faster internet, charging stations, social housing and a climate neutral economy. Rail operator Deutsche Bahn alone was getting 24 billion euros extra in investment over the coming four years.
Such sums showed Germany was holding its own vis-à-vis the United States and the $430 billion U.S. Inflation Reduction Act (IRA), he said.
(Reporting by Sarah Marsh and Andreas Rinke; Editing by Miranda Murray and Friederike Heine)
