coalition
Traffic light postpones decision on pension package
The federal government is postponing the decision on the planned pension increase. photo
© Fernando Gutierrez-Juarez/dpa
The coalition had actually already agreed on the core of the pension package. Internal conflicts are delaying approval in the cabinet. That has to do with the budget – and an FDP party conference.
There is a new debate in the federal government about pension policy. The traffic light coalition postponed the decision on its second, which had actually already been negotiated Pension package – reportedly due to concerns from the FDP. As the German Press Agency learned from government circles, the draft will not be approved by the cabinet on Wednesday. But it was agreed that this should happen in May, it was said. Chancellor Olaf Scholz assured: “The pension package is coming, and it will come in May.”
The coalition leaders Scholz (SPD), Vice Chancellor Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) had previously met in the Chancellery. This was a long-arranged conversation about the federal budget and the dynamization of the economy, during which the topic of pensions was also discussed, said Scholz.
According to a report in the “Bild” newspaper, the Ministry of Finance blocked the pension package from being passed this week. After the meeting, Minister Lindner said: “Due to the high number of registrations for the 2025 budget, current projects must be reclassified into the overall context.” Lindner said in the evening on the ZDF program “How are you, Germany” that some departments had “not yet internalized the economic realities”. But the knowledge has grown.
According to a report in the “Bild” newspaper, the Ministry of Finance blocked the pension package from being passed this week. After the meeting, Minister Lindner said: “Due to the high number of registrations for the 2025 budget, current projects must be reclassified into the overall context.” Discussions within the government are currently being held on this matter. The decision on the pension package in the cabinet is now “planned for May,” a spokeswoman confirmed.
According to information from the “Handelsblatt”, Labor Minister Hubertus Heil (SPD), who had actually already negotiated the pension package with Lindner, made particularly high demands in the negotiations on the 2025 budget. He is demanding 7.6 billion euros more than the finance minister wants to grant him, the newspaper wrote, citing government circles.
Pension level of 48 percent guaranteed until 2039
As agreed in the coalition agreement, the pension package is intended to guarantee a pension level of 48 percent until 2039. This costs additional money, so the contribution rate will increase. This increase is to be slowed down by investing billions in the capital market. From the mid-2030s onwards, annual subsidies will be paid to the pension insurance from the income.
SPD leader Lars Klingbeil emphasized on ZDF that there was an agreement on pensions in the coalition – “and I see no indication that we will deviate from it.” Green Party leader Ricarda Lang described the pension reform as absolutely necessary. The coalition must stand by its compromises together and not untie everything again so that people have security.
Criticism of the planned pension package
The FDP clearly criticized the plans at its party conference at the end of April and called for further reforms. The package “does not currently meet the requirements for intergenerational equity and long-term financial viability,” the resolution states. Contributions also need to be stabilized so as not to place undue burdens on young people.
IG Metall criticized the postponement as irresponsible. “Procrastination and party tactics on elementary social issues such as pensions destroy all trust,” explained the union. The German Social Association also criticized the matter. “It is unbelievable and dubious that the FDP is once again torpedoing planned social policy projects and misusing them for party-political power and intrigue games,” said CEO Michaela Engelmeier of the Funke media group. The long-term stabilization of pension levels is too important to play power games at their expense.