Focus on Pensions, Health in German Coalition Talks
October 28, 2005
According to plans from the two major parties, the Social Democratic Party (SPD) and the Christian Union parties (CDU/CSU), Germans will probably have to work longer.
In a third round of coalition negotiations on Thursday, the two sides discussed an increase in the retirement age from 65 to 67. The plan envisages a gradual increase in retirement age which will reach 67 by 2035.
The move comes in the wake of dwindling contributions to the state pension system as a result of low birth rates and rising life expectancy in Germany. Government subsidies to the cash-strapped system have skyrocketed over the past decade and have contributed to gaping holes in state coffers.
Curbing early retirement
The pension woes have been compounded by the fact that a huge number of Germans currently retire before the age of 65. SPD leader Franz Müntefering said that attempts would be made by the new government to curb early retirement before resorting to an increase in the general pension age.
"The decision to increase the retirement age will be decided in 2007 at the earliest," he said. "But the possibility is now open and will be part of our coalition treaty."
Germany's public health care system is also facing the demographic upheavals caused by an aging German population. This has led to a drop in the standard of health care and to rising contributions for the population as a whole.
Attempts in recent months to keep spiralling health costs in check have produced little or no results. The two parties said that huge differences remain over how to put health care funding on a sound basis again.
The draft stays
Agreement, however, was reached on Thursday about the future of military conscription in Germany. Chancellor-designate Angela Merkel appeared pleased, announcing that the first major breakthrough had been made in the negotiations.
"I strongly welcome the fact that SPD and CDU have been able to agree on keeping draft conscription in Germany," she said. "In addition, progress was made on the use of the Bundeswehr in national air space surveillance, as part of domestic attempts to fight terrorism."
Education budget safe?
The chief negotiators for the conservative bloc and the Social Democrats also briefly touched on the hot issue of cutbacks to the national budget.
Earlier this week, the two parties agreed on a reduction in the budget to the tune of 35 billion euros ($42.5 billion), which is more than 10 percent of state expenditure. Despite the dire state of public finances, Merkel said that national education and research budgets would not be affected by the cutbacks.
She added that plans to increase spending on education and industrial research in Germany to 3 percent of gross domestic product by 2010 would also be implemented.