Lauterbach Warns of Pension Cuts as Coalition Grapples with Funding Crisis
Berlin – A coalition committee discussion on Germany’s pension funding took a dramatic turn when Health Minister Karl Lauterbach warned that canceling a planned €120 billion fund would trigger pension cuts as early as 2032. Lauterbach stated the pension level would fall from 48 to 47 percent, necessitating direct cuts to pensioner payments. The revelation, corroborated by economist Hans-Werner Sinn, has thrown the already fraught negotiations into further turmoil and exposed deep fissures within the governing coalition.
The debate centers on the future of a special fund intended to secure Germany’s pension system amid demographic shifts. While the Junge Union (JU) initially proposed a slower increase in pension payments rather than outright cuts, Lauterbach’s stark warning highlighted the potential consequences of abandoning the €120 billion fund. Sinn proposed an alternative solution: delaying retirement age by ten months to stabilize the pension level without tax increases or benefit reductions.
According to reporting from The Pioneer, chancellor Friedrich Merz has found himself in a political ”dead end” due to the pension dispute, having maneuvered the SPD, the Junge Union, and his own CDU/CSU into a tough position. the number of potential rebels within the coalition has reportedly grown from 18 to between 35 and 40 MPs who could vote against the proposed pension package. Johannes Winkel, during the discussion, emphasized the statutory pension guarantee, stating pensioners “never receive a cent less per month” than previously.
