Germany's Pension Reform Debate: Extending Working Hours Divides Nation

Germany is currently embroiled in a heated debate over proposed pension reforms, primarily driven by Economics Minister Katherina Reiche's controversial suggestion to extend working hours. This proposal has sharply divided opinion across political and social spectra. Employers' President Rainer Dulger has applauded the move, emphasizing the urgent need for a comprehensive reform of the social state to prevent potential collapse. Dulger argues for reducing social benefits and lowering social contributions below 40%, citing high administration costs as a significant burden.

Conversely, social associations like the SoVD and the DGB, alongside political factions such as the SPD, Greens, and the Left, strongly oppose any increase in the retirement age. They argue that such measures are disconnected from the realities of many citizens' lives and propose alternative solutions such as better childcare and voluntary work models. Proponents like economists Raffelhüschen argue that demographic shifts and increased life expectancy make these changes necessary.

The ongoing debate reflects broader concerns about the sustainability of Germany's social welfare system. The government has announced a commission to explore potential reforms, with the aim of making the system more efficient and equitable. This debate comes at a time when around a third of Germans foresee a premature end to the current coalition, though a majority still believe in its longevity until the next federal election.

Amidst these discussions, there are calls for integrating more private capital into pension systems. Börsen-Chef Leithner's proposal for state subsidies towards private pension plans has been met with skepticism. Experts warn of potential ineffectiveness and increased social inequality, highlighting the complex challenges the German government faces in reforming its social welfare system.