A key advisory council to Germany’s Federal Ministry for Economic Affairs has urged Minister Katherina Reiche to advocate for measures to curb the rise in social contributions within the government. According to a letter from the council to Reiche, reported in Friday’s edition of the “Handelsblatt” business newspaper, the current coalition appears poised to “expand” numerous social benefits rather than address what the advisors deem a concerning upward trend.
The council is requesting that the minister carefully weigh the social policy measures agreed upon in the coalition agreement against potential risks to Germany’s overall economic development and to actively introduce this broader economic perspective within the cabinet.
Specific recommendations outlined in the letter include linking the statutory retirement age to advancements in life expectancy. Regarding future pension adjustments, the council proposes that wage growth should only serve as the benchmark for lower income earners, while higher pensions should align with the inflation rate. The advisors also suggest abolishing, or significantly restricting to those with health impairments, the option of retiring at 63 with full benefits after a long period of contributions.