Germans who retire in the future will not have the standard of living of current retirees. A “truth difficult to refute”.
It’s not the first time that Friedrich Merz releases a sentence that shakes Germany. It generates reactions, protests, indignation, sometimes fury.
Last year, it practically debunked the “myth” that it would work in Germany if it were applied globally.
The chancellor warned: “We need to work harder and, above all, more efficiently in this country. With a 4-day week and work-life balance, we will not be able to maintain the prosperity of this country.”
Now, the somewhat controversial speech was about pensions.
The summary of his words is: Germans who retire in the future will not have the standard of living of current retirees.
One “hard truth to refute“, analyzes Thomas Sigmund. The specialist warns what the problem are not the words of the chancellor: “it is the mathematics”.
With the current calculations, in a few years the pension, at best, will only give a basic coverage, advised Merz.
Those who want to guarantee their standard of living in old age will depend more on capital-financed plans private.
The reactions of other parties, namely the SPD, “are part of the usual political ritual: first, a inconvenient truth is sensationalized before the state elections in East Germany”; then the subject is diverted “to avoid discussing the real outrage”.
“But that doesn’t change the reality”, continues Sigmund, who warns that the public pension system in Germany is already “under enormous pressure.”
The federal government finances the system with R$130 billion annually in tax revenue.
And the “real test” is just beginning: there is an entire generation that is gradually retiring. THE notion more real After all, it will only be in a few years.
The issue is not to end current pensions: it is to be aware that local pensions have limits; and that there are accounts that have been neglected.
“Anyone who pretends that the level of social security can be politically guaranteed for an indefinite period of time, without generating significantly greater burdens in other areas, is selling a illusion to the public.”
There are only two solutions: either contributions increase, or the tax subsidy increases.
Otherwise, the retirement age will be a real problem in Germany; or supplementary pension plans will be expanded.
