Watch the full interview with Marcel Fratzscher here.
11/26/2025 | 4:09 min
A few days ago, economists warned the federal government against pushing through the pension package and called for it to be halted. Not so with the German Institute for Economic Research (DIW).
Nevertheless: its President Marcel Fratzscher explained in an interview with ZDF journal update today that the federal government needs to make improvements.
Watch the full interview in the video above or read an excerpt below.
In his interview, Fratzscher emphasized that…
…retirement packages don’t work that way
Fratzscher stated that the retirement package was unfair to young people. “There definitely needs to be improvements.” But it is understandable that the federal government is trying to combat poverty in old age.
Many people in Germany live in poverty and cannot meet their retirement needs. “We have made alternative proposals on how pensions can be made fairer to reduce poverty in old age and at the same time not place a greater burden on the younger generation.”
The federal government must make improvements; he couldn’t just leave the package.
Marcel Fratzscher, President of the German Institute for Economic Research
However: “We must recognize that the federal government can certainly do better, but blaming politicians alone is wrong.”
There is no socialism in Germany, there is a market economy. Companies also need to take more responsibility, “including responsibility for mistakes they made in the past.” “We make things too easy for ourselves if we just blame politics.”
About three weeks before the Christmas holidays, the younger generation of the European Union again criticized the planned pension package. However, the SPD did not want to give up and Chancellor Merz also remained firm.
11/25/2025 | 2:29 min
…required pension reform that redistributes from rich to poor
The economist stressed that Germany needs a pension reform that does not distribute more pension funds from young to old, but from rich to poor.
Our suggestion is that people with very high incomes give away a little of this money as they get older so that people with very low incomes have more money.
Marcel Fratzscher, DIW President
He explained that this is about the redistribution of generations of retirees, from the rich generation to the elderly generation with low incomes. He pointed out that some retirees have high incomes from real estate or financial assets.
According to him, the retirement age and retirement age of 63 years are also things that need to be reformed so that the social system can function again sustainably in the long term.
More and more boomers are retiring early and taking advantage of the opportunity to walk away from their careers without any deductions after 45 years of contributions. However, this creates high costs for the pension system.
11/25/2025 | 9:02 min
… The AfD is not an ordinary party
On entrepreneurs’ day, the family business association announced that it would also like to talk to the AfD in the future – a willingness to talk has sparked strong criticism from industry associations among others.
The AfD is clearly a right-wing extremist party that will cause economic harm to Germany with its political demands, explains Fratzscher at ZDF. “The AfD supports closed borders, demarcation from other countries, leaving the EU and the euro, rapprochement with autocratic regimes such as Russia, and stopping immigration, including of skilled workers.”
“He wants to talk to the AfD and tear down its firewall,” said Maria Fiedler, Der Spiegel, of the Family Business Association’s approach to the AfD.
11/25/2025 | 3:57 min
In his view, all this shows that the party is “not an ordinary party and not an ordinary democratic party.” Therefore, associations and companies must take a clear position on what is economically necessary for Germany, stressed Fratzscher. “And what the AfD is asking for is not that.”
Interview conducted by Nazan Gökdemir and summarized by Katharina Schuster.
