German Chancellor Friedrich Merz said that his government will approve the long-awaited pension reform package by the end of 2026.
The statement comes against the backdrop of growing pressure on the German pension system due to the aging population and the increasing number of pensioners. The reform is among the key commitments of the ruling coalition and is seen as an important step to ensure the long-term sustainability of public finances.
According to Merz, the government is working on a package of measures to stabilize the pension system in the coming decades. Among the options being discussed are incentives for longer working lives, changes in pension financing and measures to promote private pension insurance.
The chancellor stressed that the goal is not to reduce pensions, but to create a system that remains financially sustainable despite demographic changes. According to him, the reforms must ensure a balance between the interests of current pensioners and future generations of workers.
Germany is facing serious demographic challenges. According to official forecasts, millions of representatives of the so-called baby boom generation will retire in the coming years, which will increase the pressure on the social security system and the state budget.
The issue of pension reform has long been one of the most sensitive in German politics. Trade unions and employers' organizations are pushing for different solutions, and economists warn that postponing changes will make future reforms even more painful.
In addition to the pension system, Merz's cabinet is also preparing a broader program of economic reforms aimed at increasing the competitiveness of Europe's largest economy. The German government is seeking to boost growth after a period of economic slowdown and weak industrial activity.
The specific parameters of the pension package are expected to be presented in the coming months before the legislation is submitted for approval to the Bundestag by the end of the year.