In the internal dispute over pensions in the Union, Chancellor Friedrich Merz spontaneously spoke out on Sunday evening – and offered a compromise to the Junge Union. In the ARD program “Report from Berlin”, the CDU chairman rejected changing the law on the pension retention line of 48 percent in 2031. However, he offered that the Union and the SPD commit to carrying out fundamental pension reforms from 2032 in the legal declaration or accompanying declaration.
Merz also announced that the planned pension commission would further speed up its work. “The Pension Commission will complete its work before the summer holidays in 2026, and we will immediately start the legislative process after that,” he stressed.
The background to the dispute was a threat from the Young Group of the CDU/CSU parliamentary group in the Bundestag to thwart the pension package in the Bundestag. This group has 18 members. The majority of the black-red coalition was twelve votes. At German Day in Rust, Baden, last weekend, the Junge Union called for the draft law to be changed because, in their opinion, it contains provisions regarding pension levels after 2032.
Both Merz and Economy Minister Katherina Reiche (CDU) stressed at the weekend that they would vote for the bill. CSU leader Markus Söder said on Sunday that he would not stab Merz and CDU/CSU parliamentary group leader Jens Spahn in the back. Meanwhile, Deputy Chancellor and deputy chairman of the SPD Lars Klingbeil emphasized that there would be no changes to the draft law.
He received support from the Prime Minister of Rhineland-Pfalz, Alexander Schweitzer. “This pension debate creates uncertainty. It is the poison of the moment,” the SPD politician told media group Funke. “For most of the 21 million old-age pensioners, the statutory pension is the only income,” he added. That’s why he agrees with the Chancellor that there should be no downward competition in terms of pension levels in the Union.
Who offers the lowest pension rates? You can’t be serious,” the CDU leader said at the Junge Union on Saturday. If he concedes, he may get praise from the JU, but he will “definitely” not win the election that way. “I have to ensure that we remain structurally capable of obtaining a majority in the Federal Republic of Germany,” stressed Merz. As Chancellor, he will have to balance the interests of different groups. “I no longer represent the opposition, but I am the head of the government and I have to make sure this government remains united,” the CDU leader said at the ARD on Sunday evening. The basis of the deal with the SPD is a coalition agreement. The Junge Association criticized the fact that the draft law goes beyond this.
Junge Union fears additional costs of 120 billion euros in the following years. Merz rejected the calculation and considered it a hypothesis. This is because in the coalition agreement with the SPD it was agreed to set new indicators for the level of pension provision for the period after 2031. This then includes mandatory pensions, company pensions and expanded funded protection. That’s why there will be a new debate about what exactly is meant by 48 percent. So far, statutory pension means a percentage of the last average wage.
Prospects for reform starting in 2032
Merz stressed on Sunday evening that he wanted to discuss with the SPD how to state in the text accompanying the bill that the government wants fundamental pension reform from 2032. “There may also be other indications in the justification for the law about how things should proceed after 2031. I am very open about that,” the Chancellor said.
The AfD, which sometimes leads in surveys, promises to increase pension levels to more than 70 percent in the future – even if economists consider this unaffordable.
In addition to the holding line, retirement packages also include so-called active pensions, which are intended to provide employees with incentives to voluntarily work beyond retirement age. This is very important for the CDU. This also includes reinstating pension funding for mothers, which the CSU is particularly emphasizing. The SPD and the Union have agreed that all aspects of the pension package must be mutually agreed.
If young lawmakers kill the bill, other projects would also be at risk. Söder also pushed for his mother’s retirement on Sunday – which was rejected again by JU chairman Johannes Winkel.
