Merz Plans To Raise Germany’s Retirement Age Above 67

Chancellor Friedrich Merz plans to raise Germany’s retirement age to one of the highest in the industrialized world as part of a series of reforms aimed at reviving the nation’s struggling economy.Mr. Merz, on Thursday, said Germany’s ruling coalition had agreed to 34 measures that focus on tax, labor rules, and pension reforms.The coalition said it was agreeing with recommendations from a commission set up to study the pension system. The goal will be to pass a package of pension reform measures by the end of the year. One major change will be to eventually raise the retirement age above the current age of 67. The potential new retirement age was not immediately announced. Supporters of the plan say raising the retirement age is critical to “future-proof” the pension system as Germans continue to live longer.The package also includes tax relief for lower and middle-class families. Mr. Merz says the average household will see about 600 euros in tax relief per year under the plan. The tax relief would be paid for in higher taxes on workers earning more than 250,000 euros a year. The top tax rate will rise from 45 percent to 47 percent.“People are ready for change, and change works when it’s fair,” Germany’s finance minister, Lars Klingbeil, said in a release.Labor reforms are aimed at better competing in the global economy. One big change will be to double the length of time companies can sign a temporary worker to a fixed-term employment contract for up to four years. “This is a particularly important opportunity for young companies, for start-ups , but also for companies that want to expand, to create new jobs,” Mr. Merz said. Rules for requesting sick time will also be tightened. Doctors would be banned from issuing sick leave certificates over the phone — they would have to physically examine the patient. Workers would also be required to see a doctor for any illness that requires them to take paid sick leave. Currently a worker can take three days in a row of sick leave before having to consult a doctor.Mr. Merz said it was a “tough decision” to change the rules but is needed because current regulations are causing a competitive disadvantage to German companies.The coalition agreement would also reduce corporate reporting obligations. Business groups support the agreement but trade union IG Metall said the labour reforms were “an attack on workers’ rights.”The metal workers union IG Metall said it welcomed some of the reforms but claimed others were “an attack on employees’ rights.” “We will fight tooth and nail to preserve the pension after 45 years of contributions and partial retirement – and the fight for the 8-hour workday continues. Reforms must generate growth,” the union said in a release.Mr. Merz’s coalition of center-right and center-left parties took office just over a year ago but has become unpopular. The coalition hopes the reforms help diminish the appeal of the Alternative for Germany party ahead of September regional elections. AfD has been leading in posing in the eastern regions where elections are set.“Another broken CDU election promise, even more left-wing redistribution & minimal compromises that don’t deserve the name ‘reform.’,” the AfD co-leader, Alice Weidel stated in an X post. “The fact that this is being sold as a ‘breakthrough’ shows only one thing: this government’s complete inability to reform,” she added.

Merz Plans To Raise Germany’s Retirement Age Above 67

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