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Taking a stand

July 14, 2009

When wages go up, state pensions should follow; when wages go down, the same should apply. But that's not what's happening in Germany in an election year. Now, one minister has broken ranks and protested.

Four elderly people looking out of a window
Pensioners worry they'll get left behind economicallyImage: picture-alliance / dpa

German Finance Minister Peer Steinbrueck has criticized a change in government policy under which pensioners will never suffer cuts in their state pension in the future, even if wages fall. Steinbrueck has failed to win the support of his Social Democratic Party for his criticism.

The new policy was adopted when it became clear that pensions would have to be cut as a result of the fall in average wages because of the economic crisis.

Steinbrueck says the change will be a burden for future generations. But the leaders of both coalition partners, the Christian Democrats and the Social Democrats, have confirmed their support for the so-called pension guarantee.

Steinbrueck not on his own

Peer Steinbrueck is known for speaking his mindImage: AP

However, Steinbrueck, 62, is winning support from younger politicians. The head of the Bavarian Young Christian Democrats, Stefan Mueller, 34, said that the burden of demographic change "should not be borne on the backs of the young."

He had already won the support of the opposition and of employers' organizations for his view. But he was seriously criticized by pensioners' groups.

The likelihood that the pension guarantee will have to be called in is seen as small, since it looks as if wages will increase slightly this year and next.

Smaller pensions in future

Meanwhile, the German pensions authority has issued figures which show that the pension eventually paid in future will be considerably lower than that paid out now. A 50 year old can expect a pension six percent lower than someone retiring now. And he'll have to work until he's 67 to get it, while the current pensioner can retire at 65.

mll/AP/dpa/Reuters/AFP
Editor: Trinity Hartman

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