Germany’s coalition reaches breakthrough on pension reform

Germany’s coalition government agreed on a comprehensive pension reform package late on Wednesday night, ending weeks of bitter internal disagreement between the three governing parties.

The package combines a gradual increase in the statutory retirement age, expanded state subsidies for occupational pensions, and a new sovereign wealth fund seeded with €200 billion to stabilise the contribution rate over the next two decades.

Chancellor described the agreement as “historic” and said it would safeguard the pension system “for at least one generation”. Opposition parties criticised the package as insufficient to address demographic pressures.

The legislation will be submitted to the Bundestag before the summer recess.