There is once again a bad mood in the traffic light coalition. The reason: strict savings requirements for the 2025 budget. Among other things, the FDP wants to save on pensions – which the Chancellor strictly rejects. The Greens seem to be making at least some progress.
The dispute over the federal budget and possible pension cuts continues in the coalition. While the FDP relies on savings in social and pension policy, Chancellor Olaf Scholz (SPD) strictly rejects cuts for pensioners in Germany. “It shouldn’t be at their expense,” emphasized Scholz on Saturday at a panel discussion organized by the Editorial Network Germany (RND) in Potsdam. Scholz also rejected the suggestion of a higher retirement age and called it “absurd”. That is “not the right way to restructure a household,” said Scholz. “That wouldn’t help at all.” Criticism of the Liberals’ austerity plans also came from the German Federation of Trade Unions. “The FDP has no heart for people who have worked crookedly for many years,” criticized DGB board member Anja Piel.
While the SPD and Chancellor Scholz have remained tough so far, the Greens are now making more thoughtful tones. Before the weekend, party leader Ricarda Lang spoke in “Spiegel” in favor of reforming the pension at 63. With regard to the pension system, Lang called for more incentives for people who are still able to work at 63 and want to continue working. “Today we are losing many employees with good expertise when they retire,” she said. FDP pension expert Pascal Kober was pleased: “It’s nice that the development is now also giving the Greens something to think about. “
In a current five-point paper that the FDP Presidium wants to adopt this Monday, the Liberals are calling for a “generationally fair budget policy”. This must comply with the debt limit of the Basic Law and must not overburden young people when financing pensions, it says. From the Liberals’ perspective, there is a need for reforms to the social systems and the abolition of earlier retirement at the age of 63.
FDP parliamentary group leader Christian Dürr had campaigned for a flexible retirement age and was criticized for his comments about working at the age of 72. The party’s general secretary, Bijan Djir-Sarai, told “Bild am Sonntag” that retirement at 63 would take valuable skilled workers away from the labor market. Anyone who wants to work longer should be able to do so “under attractive conditions”. FDP financial expert Max Mordhorst said: “It is conceivable, for example, that in the future a pension at 63 will only be possible for low earners.” In the medium term, it will have to go away completely.
The pension demands are directly related to the ongoing negotiations on the federal budget for the coming year. These are increasingly becoming a stress test in the coalition. Several federal ministries do not want to adhere to the strict austerity guidelines set by Finance Minister Christian Lindner (FDP) – which he in turn sharply criticizes. “The registrations for the 2025 federal budget did not give the impression that everyone had recognized the economic realities,” said Lindner to the Bavaria media group.
At the beginning of the week, the Ministry of Finance briefly blocked the cabinet decision on the federal government’s pension package. The package, which Lindner had actually already negotiated with Federal Labor Minister Hubertus Heil (SPD), is intended to guarantee a pension level of 48 percent until 2039. This costs additional money, so the contribution rate will increase. However, the Liberals strictly reject contribution rates that are too high. The FDP party conference in April also suggested reforming the pension package. It is currently unclear when exactly the pension package can be decided in the cabinet. Government circles said that a referral would be made in May.
Against this background, Chancellor Scholz emphasized: “It is very clear to me that one thing is important for our country, namely that we do not question social cohesion.” The Chancellor said he hopes for an agreement by July. “I think it’s clear that the budget will be ready at the beginning of July.” Scholz spoke of a major task. Without giving details, he emphasized: “We are definitely spending more money than before.”
DGB board member Anja Piel warned against “wanting to restructure the federal budget at the expense of people who have worked hard for decades”. People who had worked and paid contributions in Germany for almost half a century
The budget is likely to continue to cause controversy in the coming weeks, even beyond the pension issue. Also controversial are, among other things, the savings demands made on the Federal Development Ministry. The deputy FDP chairman Wolfgang Kubicki called for significant cuts here. “I would make massive savings in the development aid budget. Because the first thing is to restore German competitiveness, only then can we help other countries,” Kubicki told “Welt am Sonntag”.
He suggested reducing the spending level to the average of the G7 countries and saving around 20 billion euros in this area. Which in turn caused loud protests from the ranks of the Greens. Parliamentary group vice-president Agnieszka Brugger called Kubicki’s initiative “extremely dubious and extremely unwise in terms of foreign policy”. Development cooperation in its current form is also in Germany’s own interest, emphasized Brugger. Criticism of Kubicki’s proposal also came from the Union and the Left party.
Since the introduction of citizens’ money, there has been the assertion that social assistance is more worthwhile than working. Instead of cutting aid, a significant increase in the minimum wage would make full-time jobs more worthwhile again, at least the SPD is convinced.
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