Coalition round meets to discuss pensions

Coalition round meets to discuss pensions

At a meeting in the chancellor’s office, the heads of the coalition sought solutions to controversial issues of pension and labor market policy.

Chancellor angela merkel (CDU) met with CSU leader horst seehofer and vice chancellor and federal finance minister olaf scholz (SPD) in berlin on saturday evening. There were no plans to inform the public after the meeting, which was expected to last well into the night.

Merkel, seehofer and scholz, however, each plan separate public appearances for this sunday. Finance minister faces questions from citizens at the federal press conference’s open day in the early afternoon. Merkel and seehofer are expected to participate in summer interviews with ARD and ZDF, which were to be broadcast this evening. In the process, something was also allowed to become known about the evening’s meeting.

Seehofer had previously expressed optimism that the grand coalition would be able to send a signal of its ability to act after the bitter union dispute over the refoulement of migrants at the border and the government crisis of the spring. The problems are huge, especially with regard to the future of pensions. Perhaps not all problems will be solved immediately, "but I believe we will make substantial progress," he said. SPD chairwoman andrea nahles urged a quick agreement with the union on the pension issue on saturday on deutschlandfunk radio.

Federal labor minister hubertus heil (SPD) had recently accused the CDU and CSU of blocking the planned pension package. It provides for improvements to the mother’s pension and for pensioners with reduced earning capacity, relief for low-income earners in terms of social contributions, and stabilization of the pension level and contribution rates until 2025. Another point of contention in the coalition is a stronger reduction in unemployment contributions demanded by the union.

Thanks to the good economic situation, the german state currently has more money in its coffers than ever before. In the first half of the year, the federal government, states, municipalities and social security funds took in 48.1 billion euros more than they spent. This was announced by the federal statistical office on friday on the basis of preliminary data.

Nahles reiterated the SPD’s call for pension levels to be secured until 2040 and warned the coalition partner against considering longer working lives. "A security guarantee only makes sense if the retirement age is not increased at the same time," said the SPD leader. "The SPD is opposed to raising the retirement age."That would de facto mean a pension cut that could not be made with their party.

SPD budget expert johannes kahrs advocated additional taxes to stabilize the state pension until 2040. "The subsidy from the federal budget for pensions will increase in the long term," he told the newspapers of the funke mediengruppe (saturday). "We need to talk about additional sources of revenue, for example, a financial transaction tax or an additional tax on large assets."The postponement of the solidarity cuts or a higher value-added tax, however, are not an issue.

The conditions for a stronger reduction in unemployment contributions demanded by the CDU/CSU were also disputed in the coalition. Labor minister hubertus heil (SPD) considers this conceivable, but makes it subject to conditions. For example, small and medium-sized companies should be supported in investing in further education. Improvements to unemployment benefits for short-term employees are also on the agenda.

In the coalition agreement, the CDU/CSU and the SPD agreed to raise the contribution rate to unemployment insurance as of 1 january 2009. January 2019 by 0.3 points to 2.7 percent of gross salary. Contributors are to be relieved of 3.5 billion euros in this way. Union faction leader volker kauder (CDU) had recently emphasized that there was room for a 0.6-point reduction. CSU state group leader alexander dobrindt called for a reduction of "at least 0.5 percent". This would mean a relief of around six billion euros, he told the "bild" newspaper (saturday).

The background to this is that the contribution to nursing care insurance will also be increased on 1 january. January 2019 rises. Health minister jens spahn (CDU) has announced an increase of 0.3 points, but also considers a rough order of 0.5 points to be realistic. Currently, the rate is 2.55 percent of gross income; childless people pay 2.8 percent.

It was also unclear at the end of the day whether the reduction in unemployment contributions should be linked to the pension package planned by heil. It provides for improvements in maternity pensions and for pensioners on reduced earning capacity, as well as relief for low-income earners in terms of social contributions and stabilization of pension levels and contribution rates until 2025. There have recently been discussions on the design of the mother’s pension.

"So far, the union and the SPD have not delivered any convincing proposals on pensions," criticized grunen faction leader katrin goring-eckardt. She called the SPD’s push "clientelpolitik". " He promises people from regular employment contracts, who will soon retire, more benefits and thereby completely indebted to future generations." Down fell the people threatened with old-age poverty. "Pension policy is not made with boxing gloves, but only with a broad consensus, so that it lasts beyond the term of government."

The financial policy spokesman of the FDP parliamentary group, florian toncar, called the SPD "completely off its rocker". "Despite record revenues, new tax increases are to come to finance scholz’ and nahles’ completely half-baked pension promises. This was going to hit hard the people in the middle of our society."