Coalition partners of the German liberal party (FDP), along with unions and other industry associations, are urging Germany’s finance minister, Christian Lindner, to end the blockade within the government and quickly approve the pensions reform package Rentenpaket II.
“We as the SPD (Social Democratic Party) can easily pass the Rentenpaket II in the form it is currently planned,” Tanja Machalet, member of parliament (MP), told IPE.
Stabilising the level of pensions, so that wages do not rise faster than pensions, is “extremely important” for the SPD, she said, adding that with the generational capital equity fund there is the chance to slightly slow down the increase in contribution rates in the first pillar pension system.
Through the reform package, the government wants to stabilise the level of pensions at 48% of the average wage until 2039, setting up a fund within the first pillar pension system to invest in equities to slow down the contribution rate increase (the so-called Generationenkapital).
The cabinet delayed the approval of the reform package, set for yesterday, as it is reworking the budget for 2025, a spokesperson for the finance minister told IPE.
“Discussions within the government are being held to this end. A cabinet decision on the Rentenpaket II is planned for May,” the spokesperson added.
State secretaries from various ministries met on Monday to decide the agenda for today’s cabinet meeting, but the state secretary for the finance ministry struck the Rentenpaket II out discussion point, according to reports.
Lindner, who is also head of the liberal party, which is in favour of the Generationenkapital, has blocked legislative proposals.
“That is not what we agreed on in the coalition agreement,”
Tanja Machalet, MP
“The generational capital is deliberately not an equity pension based on the Swedish model. We can talk about the Swedish model, but then we also have to take everything into account. For example, pension contributions in Sweden are reimbursed through taxes and there is more than equal participation by employers in this regard,” Machalet said.
The SPD categorically rejects an equity pension model financed through contributions, taking the same stance of the Greens, while the FDP is in favour of introducing individual accounts for contributions to further develop the Generationenkapital towards a system resembling more closely the Swedish premium pension model.
“That is not what we agreed on in the coalition agreement,” Machalet said.
Andreas Audretsch, MP for the Green Party, partner in the coalition with the SPD and the FDP, has warned that delaying the approval of the pension package could lead to falling pensions, failing to prevent poverty in old age, above all protecting women.
“The stabilisation in the long-term of [the level of] pensions was one of the important promises in the coalition agreement: to prevent employees from falling into poverty in old age. The traffic light [coalition of the three parties: Greens, SPD and FDP] must agree to resume this great promise as quickly as possible,” said Anja Piel, board member at union Deutscher Gewerkschaftsbund (DGB).
The Social Association of Germany (Sozialverband Deutschland, SoVD) has also voiced concerns about the dispute over the pensions package.
SoVD’s chair Michaela Engelmeier said: “It is unbelievable that the FDP is once again torpedoing planned social policy projects and misusing them for political power and intrigue. The long-term stabilisation of pension levels is too important to play power games.”
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