Copyright politico
At the center of it is SPD Labor Minister Bärbel Bas, who wants to lock in the current pension level of 48 percent of average wages beyond 2031. She argues that safeguard is essential to prevent benefit cuts when Germany’s baby boom generation retires later this decade. For Germany, this is no small matter. Pensions are the country’s largest single item of public spending — more than defense, education or health — and the system rests on a delicate pact between workers and retirees. The coming years will see millions leaving the workforce while far fewer young people enter it, threatening to push the pay-as-you-go model to the brink. But for a bloc of younger Christian Democratic lawmakers that looks like an act of generational theft. Bas’ reform means about “€115 billion in additional costs” by 2040, according to a position paper by the 18 lawmakers who say they want to block it, seen by POLITICO. The revolt has turned into a test of Merz’s authority. His government’s 12-seat parliamentary majority is among the smallest in postwar German history, meaning that a relatively small group of lawmakers can easily stymie any measure. The end of an era The coalition’s gridlock is also being felt in Brussels. The EU’s 2035 phaseout of combustion engines — a crucial issue for Germany’s car industry that anchors nearly a fifth of the country’s exports — is another dicey issue that exposes Germany’s fading grip on Europe’s industrial transition.
