However, economist Veronika Grimm supports Junge Union’s criticism of the government’s plans. “We should not implement these pension reforms, or continue these policies until 2031, but instead undertake reforms that reduce spending, leading to improved budget sustainability,” Grimm told broadcaster rbb on Tuesday.
The scientist also said that, in his view, plans to maintain the pension rate at 48 percent after 2031 would be detrimental to future generations. This view is also shared by the Junge Union and some young CDU members in the Bundestag.
The current pension system requires increased contributions or tax subsidies that are higher than the budget, Grimm said. “This leads to increased non-wage labor costs and reduced competitiveness, thereby hindering economic development.” Alternatively, federal subsidies for pension insurance would increase significantly. “And this makes the budget situation even worse,” the scientist warned.
Grimm demanded that more private provision be made. At the same time, the current pay-as-you-go system must remain affordable. This means, for example, that the retirement age must be gradually adjusted to suit a longer life expectancy, he demanded again. In the future, existing pension funds should increase along with inflation, not along with wages as is currently the case. This will result in “a modest increase in existing pension funds, but price increases can still be offset.”
