A key advisory council to Germany’s Federal Ministry for Economic Affairs has urged Minister Katherina Reiche to advocate for measures to contain rising social contribution rates within the government. According to a letter from the council to Reiche, reported in Friday’s edition of the “Handelsblatt” business daily, the current governing coalition appears poised to “expand” numerous social benefits rather than address what the advisors deem a problematic upward trend.
The council is requesting that the Minister thoroughly evaluate proposed social policies outlined in the coalition agreement, specifically considering potential risks to Germany’s overall economic development. Advisors emphasize the need to present a broader economic perspective within the cabinet.
Specific recommendations detailed in the letter include linking the statutory retirement age to life expectancy increases. Regarding future pension adjustments, the council suggests that wage growth should only serve as the benchmark for lower income earners, while higher pensions would see increases tied solely to the inflation rate. Furthermore, the advisors propose the elimination – or at least restriction to those with health impairments – of the option to retire at 63 with full benefits after a long period of contributions.
