Germany MPs pass contested pensions Bill to boost Merz
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The Bill passed by 319 votes to 225 with 53 abstentions – within the range Mr Merz had called for.
PHOTO: EPA
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- German parliament passed a pension bill, allocating €185 billion over 15 years to maintain pensions at 48% of the average wage until 2031.
- The bill's passage highlights Chancellor Merz's weakened authority due to coalition infighting and opposition from within his own party.
- Economists and the CDU's youth wing criticise the bill for ignoring demographic changes and burdening future generations with unsustainable costs.
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BERLIN - A hotly-contested pensions Bill passed Germany’s Parliament with a solid majority on Dec 5, providing relief for Chancellor Friedrich Merz after a group of young MPs had rebelled against it.
They complained that the Bill places an unfair burden on future generations in greying Germany, where the ratio of workers to the pensioners whose benefits they finance has been falling for decades.
In the end the Bill passed by 319 votes to 225 with 53 abstentions – within the range Mr Merz had called for – much to the relief of his conservative CDU/CSU bloc and their centre-left junior partners the SPD.
Lawmakers from the CDU’s youth wing the Junge Union had in recent weeks threatened to block the Bill, fearing it would saddle future generations with unaffordable costs.
“This Bill goes against my fundamental convictions, against everything I came into politics for,” Junge Union’s Mr Pascal Reddig told the Dec 5 debate.
“I have therefore decided to not vote for this Bill.”
Passage of the Bill became highly likely after the far-left opposition party Die Linke said it would abstain, lowering the number of votes needed for it to clear the second chamber.
On the eve of the vote, Mr Merz upped the stakes, saying he wanted the Bill to pass without relying on opposition parties – turning the pensions vote into a test of unity in his fractious coalition.
The Bill keeps pensions at 48 per cent of average income until 2031, thereby meeting a key SPD demand. Junge Union rebels had voiced particular concern that this target could extend beyond 2031.
The ratio of workers to the pensioners whose benefits they finance has been falling for decades in Germany .
PHOTO: AFP
Some prominent economists backed the rebels, arguing that the measure was indiscriminate and would see pensions flow to wealthy retirees who might not need the money.
Mr Merz said the Junge Union’s concerns would be taken into account in a broader review of the pensions system due in 2026, which will also tackle the thorny issue of raising the retirement age.
“The package will not be enough to secure the future of the pensions system,” CDU general secretary Carsten Linnemann told the Dec 5 debate. “We need to take a second step, the second step has to come.”
The reform also lets retirees earn up to €2,000 a month tax free in a measure designed to boost Germany’s labour supply as it battles a rapidly ageing population. AFP
