Top meeting in the chancellery: coalition struggles to agree on the pension

Federal Chancellor Merkel, CSU leader Seehofer and Minister of Finance Scholz sought a common line in pension and social policy at a summit meeting. Seehofer spoke of "enormous problems". Results are not published.

At a meeting in Chancellery, the coalition leaders looked for solutions to controversial pension and labor market issues. Chancellor Angela Merkel came together in the evening with CSU leader Horst Seehofer and vice-chancellor and finance minister Olaf Scholz. According to Seehofer, "enormous problems" must be solved. Results of the conversation have not yet been published.

The federal labor minister, Hubertus Heil (SPD), recently accused CDU and CSU of blocking the planned pension package. It provides for improvements in maternity and invalidity pensions, relief for low-paid workers in social contributions and stabilization of pension levels and contribution rates up to 2025.

The coalition also states that a larger burden on the unemployment benefit required by the Union is needed. Thanks to the good economic situation, the German state currently has so much money in its cash register as never before. In the first half of the year, the federal government, federal states, municipalities and social security funds had a bottom line of EUR 48.1 billion more than they spent. The Federal Bureau of Statistics had informed this on Friday of preliminary data.

SPD against later retirement

After the proposal from Minister of Finance Scholz to set the pension level to 2040, the SPD debated possible ways to finance such a secured pension.

SPD leader Andrea Nahles confirmed in the Germany radio the demand for a secure pension level up to 2040. However, this must not lead to raising the retirement age. A later retirement would be equivalent to a reduction in salary, which could not be done with her party.

Higher taxes to finance pension?

The SPD budget politician Johannes Kahrs introduced additional taxes to stabilize the pension. "The federal budget for the pension will increase in the long term," Kahrs said in an interview with the newspapers of the Funke media group. That is why future "additional sources of income" are needed. Possible for Kahrs about a tax on financial transactions or an additional tax on large assets.

Backup up to 2040 instead of 2025

A week ago Scholz had demanded a guarantee for the pension level from the coalition partners CDU and CSU until 2040. This is currently around 48% and should be secured by 2025 according to the coalition agreement. The pension level is the ratio between a pension after 45 years of average salary and the current average income – it shows whether pensions lag behind wages.

Estimates assume that a pension guarantee will cost up to 100 billion euros by 2040.

Contraindications from other parties

If it was not possible to reach a consensus on the issue of pensions, Scholz would have threatened the Union with an election campaign for pensions. While Scholz was praised from his own ranks for his advance, there was an immediate contradiction on the part of the CDU. The deputy party leader Hermann Gröhe referred to the committee set up by the federal government, which will issue recommendations for the pension system from 2030 onwards.

CDU Secretary General Annegret Kramp-Karrenbauer accused the SPD of wanting to insure itself with these "very populist" proposals on pensions only in state elections. The Greens and the FDP rejected the initiative of the Federal Minister of Finance.

The Tagesschau reported on this topic on August 25, 2018 at 17:50.

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