Germany’s Pension Age Fight: Coalition Cracks Widen as Retirement at 70 Proposal Ignites Fury
Pension age
Germany’s government is teetering on the edge of a major crisis, and the flashpoint is one of the country’s most sensitive issues: the pension age. What everyone in Berlin quietly knows – that the current pension system is buckling under the weight of an ageing population – has exploded into a fierce public battle, threatening to rip apart the fragile ruling coalition.
The Spark: A Call for Retirement at 70
While Chancellor Friedrich Merz (CDU) has cautiously avoided tackling this demographic “ticking time bomb,” focusing instead on incentives for older workers, his Economy Minister, Katherina Reiche (also CDU), dropped a political grenade. Reiche, a former energy executive, declared bluntly this summer: Germans simply must work longer. Pointing to rising life expectancy and dwindling birth rates, she argued raising the retirement age to 70 is unavoidable to save the pension system.
“Demographic change makes it unavoidable: the lifetime labour period must increase,” Reiche stated. She cited a decades-old thinktank (DIW) proposal for a 70-year retirement age by 2025, contrasting it with the current reality where Germans spend roughly two-thirds of their lives employed – a ratio she called unsustainable. Reiche even suggested many find “happiness” in contributing their experience longer, not retiring early.
Coalition Chaos: SPD Pushes Back Hard
Merz, reportedly displeased and wary of angering the coalition’s junior partner, the Social Democrats (SPD), quietly urged Reiche to tread carefully. But the damage was done. The SPD, polling weakly around 15%, seized the issue.
SPD General Secretary Tim Klüssendorf slammed the door shut: “A hiking of the pension age is out of the question for us.” He equated it to a direct cut in pension benefits. Instead, the SPD advocates bolstering the pension system by integrating more people into the workforce – particularly women, through better childcare and flexible jobs. They also propose expanding contributions by including freelancers, civil servants, and MPs, and even tax hikes – ideas the conservative CDU flatly rejects.
The Stark Reality: Numbers Don’t Lie
The pension age debate isn’t abstract. The demographic math is brutal:
- Mid-1990s: 4 workers funded 1 pensioner.
- 2020: Only 3 workers funded 1 pensioner.
- 2035 (Projected): Just 2.4 workers per pensioner.
Germany already sees higher employment among 65-69-year-olds (21.2%) than the EU average (16%), with the current average retirement age at 64.7. Denmark’s recent move to raise its pirement age to 70 by 2040 adds international context.
Merz’s “Lazy Germans” Gaffe Fuels the Fire
Adding fuel to the volatile pension age discussion was Chancellor Merz himself. Earlier this year, comments widely interpreted as calling Germans “lazy” caused outrage. He warned that prosperity couldn’t be maintained with “a four-day week and work-life balance.” Though he later clarified he meant the national average work effort needed to increase, not that all individuals were lazy, the damage resonated.
Can the Coalition Survive the Pension Bomb?
The SPD points to its own legacy in the 2000s: facing mass unemployment, it courageously overhauled labour laws and gradually raised the retirement age to 67 by 2031. CDU General Secretary Carsten Linnemann now calls for similar “courage,” hoping Germany’s current economic gloom will force necessary, painful reforms.
But with Merz’s government pledging to maintain pension levels at 48% of average income until 2031 – without a clear, agreed-upon funding plan – the pension age debate has become far more than policy. It’s a fundamental wedge issue exposing deep fractures in Germany’s coalition government. As the population ages and the worker-to-pensioner ratio shrinks, the question isn’t just if the system needs reform, but whether this fragile government can survive the political earthquake that reforming it will inevitably cause.
