Germany’s leading economic advisor, Monika Schnitzer, has cautioned about the precarious state of the nation’s social security system and urged the government to implement comprehensive reforms.
Speaking to the Redaktionsnetzwerk Deutschland, Schnitzer emphasized the growing difficulty in financing pension payments through the contributions of the working population, warning that inaction could lead to systemic failure. While acknowledging that the current coalition government has addressed some economic issues and proposed certain measures, she stated that a substantial, transformative plan remains absent.
Schnitzer broadened her concerns beyond pensions, highlighting the unsustainable rise in costs associated with long-term care insurance. She argued that while support is essential, individuals must also proactively plan for potential care needs. She suggested that personal assets, including homeownership, should be considered when funding care costs, emphasizing that relying solely on public funding while leaving personal wealth untouched is not a viable long-term solution. The benefits, she stated, often accrue to heirs.
Supporting a proposal from the advisory board of the Federal Ministry for Economic Affairs and Climate Action, Schnitzer advocated for a proactive savings initiative. She suggested that the “baby boomer” generation, with approximately 20 years before likely requiring care themselves, utilize this period to contribute more to dedicated funds, ensuring future financial coverage for potential care needs. The aim, she explained, is to establish a sustainable system that balances public support with individual responsibility.