Fighting on Germany DayYoung Union rebukes Merz – he remains firm on the pension issue
Rarely has there been as much tension on German Junge Union Day as there was today. CDU and CSU youth do not want to support the pension package. When Merz arrives, they express their displeasure.
How times have changed: A year ago, Germany’s Junge Union (JU) Day was still a happy date for Friedrich Merz. The delegates celebrated in Halle an der Saale, thus escalating the situation to give impetus to the election campaign. But on this Saturday, the reception was a bit cool compared to what happened then.
At best, the Chancellor received polite applause as he walked through the halls at Europapark Rust, a theme park on the German-French border, between Freiburg and Strasbourg, accompanied by JU boss Johannes Winkel. This is not surprising because the obstacles that occurred a year ago have turned into obstacles. The Junge Union and its branch in the Bundestag, the 18-member Youth Group, were angry at the proposed Union and SPD pension package and did not want to agree to it.
Debate: What applies from 2032?
He still reluctantly supports the idea of setting the pension rate at 48 percent by 2031, as set out in the bill. However, after that, according to their demands, it should immediately fall back to 47 percent. Instead, the draft law envisages reducing the pension rate from 48 percent in 2032. This is not trivial, but would mean a difference of around 120 billion euros by 2040.
This dispute could have consequences far beyond the European Union. If 18 MPs actually reject the pension package in its entirety, the black-red coalition will be plunged into an existential crisis – with the risk of total collapse. For SPD, the pension package, especially the holding line, is part of the holy of holies.
So Merz tried to allay critics’ concerns – with a mix of insight, reassurance and warning. He asked Junge Union to provide constructive suggestions and not just say how it couldn’t be done. At the same time, he questioned the additional cost figures that were also included in the bill. “I predict to you that these calculations will be proven wrong as we undertake reforms to avoid that,” Merz assured the Young Union members.
He means the pension commission, which will start work soon. This should put pension provision on a new footing and in particular strengthen the other two pillars alongside statutory pension provision, namely private and company pension provision.
Klingbeil spoke words that were considered powerful
“What exactly does this 48 percent mean?” asked Merz. In the coalition agreement it was agreed to introduce new indicators for overall service levels. Merz doesn’t say this, but it could mean that pension levels are falling while private and corporate pension schemes are rising. Germany could change course in the future if the economy returns to growth.
The delegates’ reactions were very cautious. One by one they asked critical questions about the pension package – which from his perspective showed whether he could align it with his credibility and whether he could not even tell the SPD about his policy-making powers as Chancellor.
The latter was raised by a delegate after SPD leader and Finance Minister Lars Klingbeil allegedly made remarks about the pension package at the SPD state party conference in Baden-Württemberg. “I tell you clearly: Nothing will be changed in this law,” he said in Ulm. Merz did not provide further details, although a delegation asked about this statement.
It was very clear at Junge Union that they wanted the opposite. Anyone who asked a question got a standing ovation, but few clapped for Merz. “I’m not completely sure whether the thesis is correct, in fact the numbers are wrong,” Winkel said at the end of the debate and seemed unsure of the CDU leader.
Reddig: “We will oppose this issue”
JU chairman Winkel received cheers that Merz did not receive on Friday night: “This pension package with a follow-on cost of 120 billion euros beyond the coalition agreement, it must not happen under any circumstances,” he shouted in the hall on Friday night and was celebrated for it. The head of the youth group, Pascal Reddig, also said: “You can count on us, we will support this issue.” The harsh words he said just before Merz’s arrival. Of course it is not a coincidence that his speech is on the agenda.
Merz countered criticism about the high costs of reform in other ways. First, he asked for understanding from his coalition partners. “I am not the spokesperson for the German Social Democratic Party here,” he said. But they agreed to shift most pension provisions to capital funding and give greater weight to corporate and private pension provisions, he said.
“We have coalition partners that we have to bring in,” he said. At the same time, he warned of competition to lower pension levels, following the motto: “Who offers less?” He asked the group if anyone believed this was the way to win the election. “You can’t be serious,” he said.
Although Merz thanked the discussions several times and expressed understanding for the criticism, he emphasized that he did not want to back down on pension reform. The Junge Union clearly stated that they would continue to oppose it. The very clear announcement from Winkel and Reddig is beyond doubt. The pension rebellion continues.
