Black and red actually have a reasonable majority in the Bundestag. But the declaration of war by 18 young lawmakers from the CDU/CSU faction to block the planned pension package turned into a shock for the federal government.
Pleas from Chancellor Merz to his staff to engage “constructively” went unheeded. Vice-Chancellor Lars Klingbeil stressed at the weekend that nothing would be changed in the planned pension law.
SPD leader Bärbel Bas sided with Klingbeil on Tuesday evening on ZDF: “Everyone knows what has been agreed,” he said on the “Am Puls” program. When the moderator asked that the government was in danger of failing, Bas added: “The Junge Union should think about whether they want to let the government fail.”
Chancellor of the Exchequer Thorsten Frei (CDU) tried to reassure: “Of course we take these concerns and fears very seriously. This is a very big challenge. And because it is a very big challenge, we said we would approach this issue in a fundamental way.”
The Green Party leader accused JU of having “dishonest” motives.
Meanwhile, Green Party leader Franziska Brantner accused the Junge Union of having “dishonest” motives. “If Junge Union wants millions of workers to have a basic pension or basic security in old age in the future, they should say so openly,” Green Party leader Franziska Brantner told the “Rheinische Post” on Tuesday. “It would be disingenuous if Junge Union did not criticize both expensive active pension funds and maternal pension funds, which also cost billions.”
The mother’s pension alone costs around five billion euros a year, which is much more in the first few years than stabilizing the pension level at 48 percent, Brantner continued.
At the same time, the Green Party politician also criticized the planned pension package as generationally unfair. “What the federal government is providing now is placing a huge burden on young people, while any assistance that might be provided is being postponed indefinitely. That is also wrong,” Brantner told the newspaper. That’s why the Green Party didn’t agree to a pension package in the Bundestag.
The 18-member youth group in the CDU/CSU does not want to support the law on pension rates and maternal pensions without change. According to the wishes of the coalition leadership, the bill must actually be passed in the Bundestag in December. Without young CDU/CSU members, the coalition will not get a majority in parliament on reforms. The language in the bill is controversial: “Even after 2031, pension levels would be about one percentage point higher than under current law.”
Young MPs in the SPD parliamentary group have previously also opposed the youth group in Unity. In a joint paper published on Tuesday, some 30 SPD MPs defended themselves against accusations that the federal government’s pension concept is generationally unfair: “What the United Youth Group is selling us under ‘generational justice’ is actually a fraudulent label,” the SPD MPs’ paper said.
The Youth Group within the CDU/CSU parliamentary group advocates a model “where young people help finance pension level protection for the next five years, but no longer benefit from it even when they have retired,” the SPD politicians criticized. “Retirement rates are expected to fall again, as if stabilization had not occurred.”
Such a move “makes no sense, especially for current contributors, as they themselves would not benefit from guaranteed pension levels”. The SPD lawmaker wrote: “If we pay as young people, then we also want to get something.”
Pensions increased by an average of 2.8 percent per year
Meanwhile, new calculations show that statutory pension funding will increase by an average of about 2.8 percent per year in the coming years. By 2039, that number will increase by around 47 percent, as shown in the 2025 pension insurance report. The report is available to the German Press Agency and will be discussed in the Federal Cabinet today. The report also shows the already known estimate of a pension increase of 3.7 percent in July 2026.
Pension insurance premium income increased by around 5.1 percent compared to the previous year. Continuity reserves – pension fund reserves to compensate for fluctuations – are expected to reach 41.5 billion by the end of the year. The contribution rate must remain stable at 18.6 percent until 2027 and increase from 19.8 percent in 2028 to 20.1 percent in 2030. For 2039 it is estimated at 21.2 percent.
Estimates of the impact of the controversial pension package on the coalition are included in the calculations presented in the report. Therefore, the planned federal reimbursement as part of the pension package for the extension of the pension level cap line will amount to around 100 million euros for the first time in 2027.
Until the planned end of the 48 percent pension funding limit in 2031, these federal funds will increase significantly: to around 10.1 billion euros. Measured against total pension insurance revenues, the share should be around 2.0 percent from 2032 – and remain stable at this value until 2039.
