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Thursday 27 April 2017

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German govt to equalise East and West Germany pensions

Written by Natalie Tuck
15/02/17

The German government is making provisions to equalise the pensions gap between East and West Germany by January 2025.

According to EBL News, a draft law has been put forward by Social Affairs Minister Andrea Nahles, who is a centre-left Social Democrat in the coalition government. It was approved by the cabinet today, 15 February.

Pensions in old East Germany were kept lower than those in the West because of the gap in the wealth of the two areas, this is despite, pensions in the East being boosted by financial transfers from the west.

More than a quarter of a century after reunification of the country, wages and property values continue to be lower in the east than the west.

Nahles' draft law foresees the first step to equalisation being taken in 2018, with a total of seven steps to be taken between then and 2025. The costs of the initiative are to be covered by social security contributions and tax revenues.

However, EBL News said critics argue that the move, referred to by Nahles as "important for the internal unity of the country," will punish workers at the expense of pensioners.



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