A coalition of twenty-one leading economists and academics are urgently calling for the German government to scrap its proposed pension reform package, citing concerns over financial instability and a lack of long-term vision. The appeal, titled “Withdraw the Pension Package” and detailed in a forthcoming article in the Handelsblatt, argues that the current plan undermines the very principles of reliable and sustainable pension policy.
The proposed reforms, encompassing a pension level cap, a “mothers’ pension” an “activity-linked pension” and an early start pension, are criticized for failing to provide the predictability and fiscal responsibility crucial for maintaining public confidence. In a joint opinion piece for the Handelsblatt, three of the signatories – Michael Eilfort of the Foundation for Market Economy, Ifo Institute President Clemens Fuest and Scientific Advisory Council Chairman at the Federal Ministry of Finance, Jörg Rocholl – argue that the plans, spearheaded by the current black-red coalition government, fundamentally jeopardize the financial health of the state.
The academics specifically highlight the pension level cap and the expansion of the “mothers’ pension” as posing a significant and unsustainable burden on public finances. They warn that pushing through hasty decisions, knowing they will inevitably lead to drastic negative financial consequences within a few years, would severely damage public trust in the political process.
Instead of the current trajectory, the experts are advocating for a long-term, strategically planned approach. They contend that until a convincing reform concept, accompanied by a robust compensatory mechanism, is developed, maintaining the existing legal framework represents the more prudent course of action. The Pension Commission is presented as a suitable platform to initiate a fiscally sustainable reform, advocating for a measured and responsible evolution of the German pension system rather than a potentially destabilizing overhaul. The signatories’ intervention underscores growing unease within expert circles regarding the government’s handling of a pivotal social policy issue.
