(de-news.net) – Following sharp criticism from the Junge Union, the debate over Germany’s proposed pension reform has intensified considerably. SPD social policy specialist Annika Klose urged CDU and CSU lawmakers to respect the coalition agreement, stressing that reliable governance depended on adherence to negotiated compromises. She underlined that coalition representatives carried the responsibility of supporting agreed initiatives, even if she acknowledged the legitimacy of independent positions within party youth organizations. Without such discipline, she argued, the stability of the government itself would be jeopardized.
At the Junge Union’s ‘Deutschlandtag,’”’ CSU leader Markus Söder appealed to his party’s youth wing not to endanger the coalition in Berlin. Despite this call, the organization reiterated its opposition to stabilizing the pension level at 48 percent beyond 2031, contending that such a measure would unfairly burden younger generations. Chancellor Friedrich Merz also addressed the gathering, warning against competitive underbidding on pension levels and urging constructive participation in the debate. He recalled that the SPD had initially sought to extend the stabilization until 2039, but that the coalition had instead agreed to place the entire pension system on a new foundation. Merz emphasized that health and long-term care insurance posed even greater challenges for the future and announced that Finance Minister Lars Klingbeil (SPD) would present proposals later this year to strengthen private retirement provision.
Labor Minister Bärbel Bas (SPD) rejected any changes to the government’s plan, insisting that the 48 percent safeguard was openly negotiated and represented a continuation of earlier legislation. She argued that allowing the protection to expire would trigger abrupt pension cuts, harming precisely those younger contributors whom critics claimed to defend. Bas maintained that the safeguard was not a new invention but rather a continuation of measures introduced by the previous grand coalition. Nevertheless, resistance within the Union’s parliamentary group remained strong, with younger deputies declaring their intention to block the reform in the Bundestag.
The reform package also contains the concept of an ‘active pension,’ enabling retirees to earn up to 2,000 euros per month tax-free from employment, though contributions to social insurance would still be required. Studies suggested that if communicated effectively, this measure could increase employment among older workers by up to ten percent, equivalent to 33,000 jobs. Policymakers were advised to promote the scheme in a targeted and comprehensible manner to ensure its potential benefits were realized.
Even before the Junge Union convention, however, opposition had emerged from the corporate sector. Thirty-two business associations representing around 17 million employees warned that the reform would impose unsustainable costs, projecting an additional burden of nearly 480 billion euros by 2050. They argued that higher contributions or taxes would erode wages, diminish competitiveness, and accelerate the relocation of production abroad. The associations accused the government of undermining the pension commission’s future work, noting that its mandate to redesign the system after 2031 would be effectively curtailed before deliberations had even begun.
The business groups demanded a fundamental shift in pension policy. Among their proposals were raising the statutory retirement age, abolishing early retirement at 63, and increasing deductions for those who retire prematurely. They cautioned that without such measures, the existing pay-as-you-go system risked collapse, leaving employees with shrinking net incomes and companies with mounting financial pressures. In their view, the government’s current approach overstretched the sustainability of the pension system and failed to balance generational fairness with fiscal responsibility.
