Doubts are emerging over the effectiveness of Germany’s newly formed pension reform commission, with the President of the German Chamber of Industry and Commerce (DIHK), Peter Adrian, questioning whether it will deliver the substantial systemic changes needed to address the nation’s aging population and strained social security system. Speaking to “Welt am Sonntag” Adrian expressed concern that the commission could become merely a delaying tactic, noting that the fundamental economic realities and expert consensus regarding necessary adjustments are already well-established. The true test, he emphasized, will hinge on the government’s willingness to implement the commission’s recommendations – a history the DIHK argues demonstrates a recurring pattern of inaction.
Adrian underscored the urgent need for broader social security reforms, citing the escalating burden of payroll taxes on German businesses. Currently exceeding 40% of gross wages, alongside additional taxes, he argued that the prevailing system disproportionately penalizes hard-working individuals and hinders economic competitiveness. He suggested a reassessment of “fair contribution” policies within the social insurance framework, hinting at potential avenues for overall relief. “We are already in the midst of a redistribution struggle. If we want to stop it, we must tackle the structures” Adrian stated, clearly signaling a desire for a fundamental shift in policy direction.
While acknowledging the potential for reduced labor costs through measures like restricting sick pay, Adrian distanced the DIHK from the proposals put forward by the German Employers’ Association (BDA), citing concerns that such steps could incentivize opportunistic absenteeism.
Furthermore, Adrian voiced disappointment with the pace of reform under the current “black-red” coalition government. Expectations for swift and sweeping changes, particularly regarding regulatory burdens, corporate taxes and energy costs, have largely gone unmet. The promised reduction of bureaucracy, cuts to corporate taxes and relief from electricity taxes have failed to deliver tangible benefits for businesses.
Beyond pensions, Adrian delivered a sharp critique of Germany’s climate change strategy. He argues that the current trajectory is unsustainable and unlikely to achieve the nation’s stated climate neutrality goals. A recent DIHK study estimates that Germany’s transformation pathway to 2049 could cost over five trillion euros, requiring investment levels significantly higher than current commitments. Adrian advocates for a recalibration of approach, not a reduction of ambition.
He criticized the current approach as pursuing increasingly stringent domestic standards while simultaneously importing goods produced in countries with less rigorous environmental regulations. He called for a global consensus on minimum environmental standards, arguing that unilateral German action risks damaging the nation’s industrial competitiveness and ultimately hindering global climate efforts. “If Germany burdens its basic materials industry with ever stricter requirements, but then imports steel and chemicals from countries with poorer standards, the climate is not being helped – on the contrary” he asserted, emphasizing the critical need for international coordination to achieve meaningful progress.