Germany’s pension system under threat. Dulger: on the brink of collapse
The leader of the Confederation of German Employers’ Unions (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA – ed.), An institution representing employers employing about 20 million throughout Germany, in an interview with “Bild am Sonntag” admitted that the economy of our western neighbor is weakening and the pension system is “on the brink of collapse”.
According to Rainer Dulger, it is necessary to carry out reforms so profound that they can only be compared with the changes introduced after the reunification of Germany in the 1990s.
Threats to the system
Dulger directly admitted that his opinion of threats to the pension system should be taken as seriously as, for example, climate change or the need for an energy transformation.
According to Dulger, demographic problems – aging society and labor shortages – should urge the government to link retirement age to life expectancy.
Current chancellor Olaf Scholz however, he rejected a call to raise the retirement age in 2021, when he was still finance minister. He then argued that “there is no need” to raise the retirement age to 68, and argued that in his opinion it was “socially unfair”.
German pension expenditure
In 2019, expenditure on pensions corresponded to approx. 10.1 percent. Germany’s GDP, but according to the “The 2021 Aging Report” published by the European Commission, in 2070 it will increase to 12.2 percent. Over two percentage points of growth will be one of the highest rates in the whole of Europe – higher will appear only in Ireland (2.6 pp.) And the Netherlands (2.2 pp.).
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