(de-news.net) – German Chancellor Friedrich Merz (CDU) has renewed calls to abolish Germany’s so-called pension at 63, arguing that demographic pressures require a more sustainable and equitable retirement system. The proposal remains contentious within the governing coalition. As political leaders urge faster reforms, disagreements over retirement benefits, social security financing and the future of the coalition have intensified following Bärbel Bas’s (SPD) resignation as labor minister and SPD chair. Her designated successor, Alexander Schweitzer (also SPD), has pledged to advance pension legislation but insists that outstanding differences must first be resolved through coalition negotiations.

Chancellor Merz reiterated his call Tuesday to abolish the so-called “pension at 63,” arguing that demographic pressures have made penalty-free early retirement increasingly difficult to justify. Speaking at the German Employers’ Day in Berlin, organized by the Confederation of German Employers’ Associations (BDA), Merz said a shrinking workforce could not sustainably finance a growing retired population. Eliminating the provision, he argued, would distribute pension costs more equitably while addressing mounting pressure on Germany’s social security system.

The proposal remains a major point of contention in the government’s planned pension overhaul. The pension commission recommended ending the special retirement provision for people with particularly long contribution histories, but the proposal has encountered resistance within the Social Democratic Party (SPD) and parts of the conservative bloc. Schweitzer, the designated labor minister who is expected to oversee implementation of the reform, has also questioned aspects of the commission’s recommendations, underscoring the difficulties facing the coalition as it seeks agreement on the future of retirement policy.

Merz links aocial security reform to intergenerational fairness

Merz linked the proposed changes to a broader effort to restore confidence in Germany’s social security system, particularly among younger generations. Many young people, he noted, question whether the pension, health care and long-term care systems will provide adequate protection when they reach old age or face illness. The government therefore needs to demonstrate that social benefits can remain dependable without placing an unsustainable financial burden on future contributors. Merz said the planned reforms across the major social insurance programs were intended to rebuild that confidence and secure lasting public support.

Long-term care presents a related challenge, Merz argued, because policymakers must balance collective protection with individual financial responsibility. People who cannot afford care should continue to be supported by the welfare state, while those with sufficient resources should contribute more toward their own expenses. At the same time, Merz identified stable contribution rates as a long-term objective for the social insurance system. Establishing a capital-funded component of the pension system could require temporarily higher contributions, he said, adding that Germany had delayed pursuing such an approach by roughly three decades.

BDA President Rainer Dulger called on the governing coalition to accelerate its reform agenda, arguing that a centrist government needed to demonstrate its ability to address the country’s economic and demographic challenges. Sustainable social policy, he maintained, must account for both the people who depend on public benefits and the workers whose employment and contributions finance them. Because demographic change cannot be resolved through political negotiations alone, Dulger emphasized the importance of timely decisions and a more determined approach to reform.

Coalition divisions slowing down pension legislation

Schweitzer has pledged to move pension legislation forward after taking office, although he has not committed to adopting the commission’s recommendations in their entirety. He said the outstanding proposals required further substantive discussion before they could be translated into legislation. His ministry would work to prepare the necessary bills efficiently and carefully, but their introduction depended on the coalition reaching agreement on the unresolved issues. SPD chairman Lars Klingbeil, who also serves as finance minister, likewise emphasized the need to settle outstanding disagreements and develop a broad social compromise capable of securing support beyond the governing parties.

Bavarian Premier Markus Söder (CSU) also pressed the coalition to accelerate its reform efforts, warning that internal disputes should not become an excuse for further delays. He argued that maintaining the economic recovery required continued action on structural reforms and shared responsibility across the government. Rather than postponing decisions until the SPD agreed to every proposal, Söder said, coalition partners needed to work toward concrete results.

Political tensions within the SPD have also grown following Bärbel Bas’s withdrawal from the party leadership and departure as labor minister. Esra Limbacher, a deputy leader of the SPD parliamentary group, called for greater stability and a renewed focus on policy, backing Klingbeil rather than encouraging further debate over party leadership. In his view, voters were more concerned about the country’s future direction than about internal personnel discussions.

Limbacher also signaled that changes to the retirement provision for people with 45 years of contributions could be considered, while insisting that those who had relied on the existing rules should retain access to the arrangement. Pension reform was necessary, he argued, but it should not create new inequities for people who had organized their working lives around established retirement provisions. He also called for faster legislative action and cautioned against making spending commitments without identifying sustainable sources of revenue. In particular, he warned that a possible reduction in electricity taxes should not be promised without regard to the federal budget’s long-term viability.

State leaders urge reform as discussions over Bas still go on

Saxony Premier Michael Kretschmer (CDU) expressed sympathy for Bas following the personal loss that preceded her withdrawal from government and party leadership. He nevertheless urged the federal government to continue advancing major policy initiatives, especially pension reform, despite the personnel changes. Kretschmer has joined other eastern German state leaders in opposing the proposed abolition of early retirement for long-term contributors, arguing that changes must account for Germany’s varied employment histories and avoid disadvantaging people who have worked for decades.

Kretschmer also identified labor-market flexibility, reduced bureaucracy and improved conditions for employers and employees as important priorities for Schweitzer. The incoming labor minister, he argued, would face substantial responsibilities in addressing these issues as the government attempts to advance its broader reform agenda.

Meanwhile, senior conservative lawmakers rejected SPD allegations that Bas had been personally targeted during the pension dispute. Catarina dos Santos-Wintz, parliamentary manager of the CDU/CSU parliamentary group, said criticism had focused on the labor ministry’s failure to submit legislation implementing the pension agreement rather than on Bas herself. She maintained that asking the ministry to fulfill its legislative responsibilities did not constitute a personal attack on the minister.

Bas announced her resignation as labor minister and SPD chair on Monday following the death of her stepdaughter. Her departure has intensified debate over the political handling of the pension dispute and the pace of the coalition’s reform program. SPD politician Klose defended Bas against allegations that she had obstructed reform, adding another dimension to the disagreement over responsibility for the stalled legislative process.