Expert: German pension reform proposals 'lack courage and consistency'

The German pension commission's leaked reform proposals "lack courage and consistency," a top economic analyst warned on Sunday, ahead of an official presentation of the plan next week. 

"The reform proposals lack courage and consistency, as they do not change anything fundamental in the three biggest problems: high poverty levels in old age, a too-heavy burden on the young generation and the imbalance in equity," the head of the German Institute for Economic Research (DIW), Marcel Fratzscher, told the Rheinische Post newspaper.

Amid longstanding concerns over funding for the German pension system, Chancellor Friedrich Merz's coalition set up a high-ranking commission of 13 experts in January to issue recommendations. 

The 30 proposals are due to be presented on Tuesday, but the main findings were reported on in German media on Saturday.

They include linking the retirement age to national life expectancy, investing pension contributions on the stock market, and the abolition of early pensions for 63-year-olds having already made 45 years of contributions.

Fratzscher said that while the commission has made recommendations, the government has to take decisions. 

While he praised positive elements such as the higher retirement age, he warned that nothing was being done to counter rising old-age poverty.

Fratzscher called for the basic pension to be increased, for the income and assets of the better-off to be taken into account and for pensions to be placed on a more sustainable financial basis.

The proposals are part of a series of reforms Merz's government is seeking to push through before the summer break, including changes to the labour market, income tax, and bureaucracy reduction.

Merz has said the goal is to reform Germany's foundations for "perhaps a decade," while his coalition partners in the Social Democrats have signalled readiness to compromise but ruled out blanket social spending cuts.