For the past two months, German politics has been arguing almost every day about the same thing: pension reform. Where will Germany's consistent "48%" pension system go with the coalition of the coalition party (CDU/CSU, C DU/CSU) in power?

Pension plan

The reasons for this are not complicated: two months ago, Labour Minister Bärbel Bas (SPD) proposed a pension package that would raise future pension levels by about one percentage point. This seemingly insignificant adjustment has sparked a backlash from young parliamentarians from the coalition party (CDU/CSU), employers' organizations and some economists.

To understand this political storm, we must start with the background of this plan. The entire pension plan is divided into three parts:

1.Establishment of active pensions (CDU project: encourage retirees to continue working and income is tax-free)

2.Establishment of a mother's pension (CSU )

3.48% pension level floor (SPD )

The most controversial of these is the third part promoted by the SPD

Under the current law, the ratio of pensions relative to average salaries needs to be maintained at 48% until 2031, a stable consensus set by the Union Party and the SPD at the beginning of the formation of the current federal government. However, on the question of "what to do after 2031", the SPD hopes to continue to ensure that this proportion does not decrease after 2031, and even hopes to go up a little more and tie the growth rate more closely to wages.

This sounds like a long-term "peace of mind gift package" for future retirees, but the problem is that pensions do not appear out of thin air, and it requires a larger increase in pension contribution rates and further large subsidies from the federal budget. Rainer Dulger, president of the German Employers' Federation, pointed out that the practice of fixing the pension level at 48% combined with the planned "mother's pension" will lead to about 200 billion euros in expenditure over the next 15 years.

Working young people, the middle class, and taxpayers will all bear the price of this policy in the coming decades.

This seemingly technical policy has sparked fierce conflicts within political parties, conflicting interests between generations, and even putting the entire federal government in jeopardy