German Chancellor Olaf Scholz argued on Wednesday that responsible politicians should not engage in a "competition with populists and extremists," but instead search for real solutions to issues facing the people.
Scholz, in a speech to German parliament, called recent successes by right-wing populist parties in this month's European Parliament elections a "turning point."
The far-right Alternative for Germany (AfD) placed second in the election among German voters, while the three parties in Scholz's coalition suffered losses. Scholz's Social Democrats (SPD) faced their worst performance in a nationwide democratic election in more than a century.
Scholz said that a number of recent crises have caused people to call their trust and sense of security into question, and lose confidence in government.
"We have to face up to this," Scholz said.
"We need to re-establish confidence where it is lacking," said Scholz, referring to both Germany and the European Union.
"There will be no return to the good old days, most of which were never that good, but what we need is a political perspective where we can gain a good future in uncertain times," he told lawmakers.
The chancellor was followed by conservative opposition leader Friedrich Merz of the Christian Democrats (CDU), who denounced Scholz's leadership and accused his coalition of governing against the interests of regular Germans.
Scholz: Budget still on track
Scholz also said that talks in his coalition over the 2025 government budget remain on track, despite reports of intense disagreements over proposed cuts.
Scholz said that there were collegial, fact-oriented and confidential talks on the budget for the coming year and a package intended to boost economic growth.
"We will present the draft budget in July," he pledged.
Scholz, Vice-Chancellor Robert Habeck of the Greens and Finance Minister Christian Lindner of the pro-business Free Democrats (FDP) had originally planned a Cabinet decision on July 3.
But delays in reaching a political agreement on the outlines of the budget mean that date can no longer be met, since civil servants at the Finance Ministry will need time to translate any deal into a draft budget document.
The Cabinet is now aiming to present a budget at its meeting on July 17, dpa has learned.
Negotiators must find ways to plug a gap that runs into the tens of billions of euros, and solve intense disagreements about whether to allow deficit spending despite tight rules on government borrowing.
"More security, more cohesion, more growth - these are the priorities for our country," Scholz said. "There must be no cuts in social justice, health, care or pensions."
Scholz pitches economic package
In order to boost economic growth, Scholz said there should be better incentives for people who want to continue working past retirement age.
He also suggested simplifying tax law, reducing bureaucracy and making depreciation rules more advantageous to companies that invest in their businesses.
Strict action must be taken against the abuse of state benefits, he said.
"It is unacceptable, for example, that some people receive [welfare] benefits and work illegally at the same time," said Scholz. "We will create the legal framework to ensure that this no longer happens."
