The current coalition government’s proposed pension reforms are fundamentally misguided and require a complete overhaul, according to Veronika Grimm, a leading voice on the German government’s Council of Economic Experts. In an interview with the “Rheinische Post”, Grimm sharply criticized the planned package, arguing it fails to address the long-term sustainability of the German pension system and instead exacerbates existing vulnerabilities.
Grimm specifically condemned the inclusion of the “mothers’ pension” and the so-called “red line” – a commitment to maintain current pension levels – asserting that they represent unsustainable burdens on the system. She emphasized the urgent need to link the retirement age to increasing life expectancy and to adjust existing pension payments to reflect inflation, rather than wage growth, a point that reflects a deeper debate about the distribution of economic gains. Reinstating a focus on “sustainability” should be the central guiding principle, she argued.
The economist’s critique underscores a growing concern amongst experts regarding the government’s approach. Her pointed observation that the statutory pension insurance’s expenditures are increasing despite an urgent need to reduce them highlights a fundamental contradiction at the heart of the policy. The current package, Grimm contends, moves the system in the “completely wrong direction” risking long-term instability and potentially necessitating even more drastic interventions down the line. This criticism places considerable political pressure on the ruling coalition to fundamentally reconsider its strategy, exposing a potential fracture within the government’s approach to one of Germany’s most critical social programs.