Germany will cut welfare benefits, introduce new taxes and shed government jobs to save as much as euro80 billion ($96 billion) through 2014 and set an example for the rest of Europe, Chancellor Angela Merkel said Monday.
The wide-ranging savings package finalized by the Cabinet includes trims in social programs such a subsidy for new parents who stay home, more taxation for the nuclear power industry, and delaying the building of a replica of a Prussian palace in the heart of Berlin.
Merkel said as many as 15,000 federal government jobs could be shed through 2014.
In addition, the government wants to levy a special charge on passengers flying from German airports until aviation is included in an international carbon dioxide emissions trading scheme. Looking farther ahead, the Cabinet said it hopes to save money by reforming the military and will consider trimming the 250,000-strong force by up to 40,000.
The new nuclear tax is aimed at netting euro10 billion throughout 2014, but the bulk of the savings will come from the welfare budget — a total of euro30 billion.
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