Germany's pension reform: Chancellor Merz fully backs commission proposals

German Chancellor Friedrich Merz plans to implement unchanged the pension reform commission's proposals, including eliminating the option to retire at 63 and creating a new capital-based pension system. CDU middle-class representative Gitta Connemann criticises energy policy mistakes and demands broad tax incentives for businesses.

Germany's political debate centres on pension reform, with a commission having put forward a series of proposals that Chancellor Friedrich Merz wants to implement in full. The main changes concern the abolition of the so-called 63-year-old retirement option and the launch of a new capital-based pension scheme.

Main reform directions

Analysts question how realistic it is that the commission's proposals will pass through the legislative process and emerge exactly as they have been presented. A capital-based pension system represents a novel step for Germany, where the existing pension system has been based primarily on intergenerational solidarity.

Connemann: energy prices and bureaucracy burden businesses

CDU middle-class representative Gitta Connemann highlighted that the poor sentiment among Germany's small and medium-sized enterprises stems from energy policy. She argued that high energy prices are partly the result of former Green economic minister Robert Habeck's policies.

Connemann rejected the SPD's proposed "artificial intelligence voucher" idea, saying it would create too much bureaucracy. Instead, she demands broad tax incentives and better competitive conditions for businesses.

Taxing the wealthy gets a negative response

According to Connemann, she does not support introducing wealth or property taxes, as such levies would not target billionaires but rather tradespeople and freelancers. "It doesn't hit billionaires, it hits tradespeople and freelancers," she stressed.

Germany's economic policy debates continue to be tense as the country seeks to balance the sustainability of social security with maintaining business competitiveness.