Germany’s Chancellor Friedrich Merz dug in on proposed pension reforms on Friday, November 28th—despite resistance from younger members of his centre-right CDU party, who fear they will saddle future generations with unaffordable debts.
Speaking on Friday morning after late-night talks with junior coalition partners the centre-left Social Democrats (SPD), Merz said it was the SPD’s “wish that we not amend this bill,” adding “We agreed on this yesterday.”
The reform is central to the coalition agreement between the two parties and was approved by the cabinet in August.
In recent weeks however, 18 lawmakers from the CDU’s Junge Union youth wing had threatened to block the plan at a parliamentary vote expected next week.
Their votes are crucial as the government only has a majority of 12.
Merz said the Junge Union’s concerns would be taken into account in a broader review of the pensions system due in 2026, which will also tackle the issue of setting a new retirement age.
The government’s current pension proposals aim to keep pensions at 48% of average income until 2031, thereby meeting a key SPD demand.
The Junge Union rebels have voiced particular concern at the idea that this target could extend beyond 2031. They say this would penalise younger Germans who would have to foot the bill for pensions as the population ages.
Some prominent economists have backed the rebels, arguing that the measure was indiscriminate and would see pensions flow to wealthy retirees who might not need the money.
The government also plans a provision for a so-called “active retirement” enabling pensioners to earn up to €2,000 tax-free per month if they wish to continue working.
The reform also includes an extension of “mothers’ pensions”: payments to women who spent time out of the workforce to raise children.
