The fragile coalition government in Germany faces mounting pressure to abandon its proposed pension package, with leading economists warning of unsustainable policies and a deepening burden on younger generations. Martin Werding, a member of the government’s Council of Economic Experts, is urging the ruling parties to move beyond the current, stop-gap measures and embrace more profound pension reforms. He argues that both the temporary “stability line” and the proposed expansion of the “mother’s pension” are misguided responses to demographic aging and, crucially, financially unsound given the government’s current tax planning.
Werding’s critique highlights a growing rift within the ruling parties, with a faction of up to 18 parliamentarians from the “Young Group” within the conservative Union bloc threatening to block the legislation. Their primary concern stems from the planned strategy to maintain the pension level at 48% beyond 1931, a move perceived as unfairly disadvantaging younger workers. The Social Democratic Party (SPD), a key coalition partner, remains steadfast in its support for the cabinet-approved plans.
The debate goes beyond a simple disagreement over policy specifics. Economist Hans-Werner Sinn echoes Werding’s concerns, pointing to a potentially disastrous future for Germany’s younger generation. He contends that the current situation is “fatal” as the Baby Boomer generation, having produced too few offspring to sustain the pension system, is simultaneously accumulating debt in an attempt to alleviate their own retirement concerns. This debt, Sinn warns, will be shouldered by the younger generation.
Sinn predicts that the demographic consequences will soon become starkly visible, forecasting widespread poverty and a critical need for elder care amongst the Baby Boomer generation. He believes this will inevitably force a societal reassessment of priorities. Emphasizing the urgent need for proactive solutions, Sinn states bluntly that divine intervention is unlikely and that decisive action is required to address Germany’s demographic challenges. The internal coalition conflict and the escalating warnings from leading economists raise serious questions about the long-term sustainability of Germany’s social security system and the political courage required to enact meaningful reform.
