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Europe

German Press Review: Punishing the Pensioners?

Editorialists at Germany’s dailies on Monday weigh in on sweeping labor market reforms passed by parliament on Friday and painful pension cuts announced over the weekend.

The cabinet of Chancellor Gerhard Schröder as well as party leaders of the ruling Greens and Social Democrats agreed over the weekend there would be no cost-of-living increase in pensions in 2004 and that pensioners would now have to pay the full rate for their private nursing insurance. Previously, pensioners only had to pay half of the premium. The government hopes that the cuts will save employers money on costly social insurance, making it easier to create new jobs.

But newspapers across the country questioned on Monday whether the cuts would pose too great a burden for the elderly, who have already been asked to pay more for their healthcare.

The Düsseldorf-based financial daily Handelsblatt opined that "Gerhard Schröder has kept his word." The contribution rate to the pension insurance funds will remain stable in 2004. "In view of the big gap in the state pension scheme, that’s good news," the paper wrote. "In order to improve the economic situation and the employment rate, however, it would have been better to cut the ancillary wage costs." But, the paper wrote, against the background of the discussion within the Social Democratic Party, it’s already a success if the contribution rate isn’t raised. Even so, the chancellor’s emergency operation was not without its risks. Since pension reserves have practically vanished, in the future the Finance Ministry will have to compensate for even minor losses. "That will invariably lead to insecurity and loss of trust, not only for the public pension fund but also for the German state’s financial policy," Handelsblatt editors concluded.

The daily Die Welt underscored the fact that this is the first time since the introduction of the social pension insurance that payments to pensioners have been cut. "This will hit many elderly people hard," the paper commented, "especially since they already carry the main burden of the healthcare reform." No wonder, the papers editors opined, "that pensioners feel that the government’s social policy consists of arbitrary measures. They will no doubt express their displeasure at the next elections."

In a similar vein, the Munich-based daily Süddeutsche Zeitung wrote: "Now it’s certain who the loser of Sunday’s decision is: the pensioners who will have to face a higher burden." It’s questionable though, the paper warned, whether a savings package "which has been tied up under these circumstances will help to balance the deficit." Too much has been shuffled around in too little time, the paper’s editors wrote. "So it all sounds like emergency help rather than sound planning."

The Cologne tabloid Kölner Express, analyzing the whole pension system, came to the conclusion that it’s already on its deathbed. "What the government decided on Sunday in order to save it," the paper commented, "will only delay its complete collapse. Even the fact that the contribution rate for employers will remain stable doesn’t change that," the daily wrote. "It’s not a lack of will, but new burdens and cuts over and over again, and that can’t be the right way," the Express concluded.

The Leipziger Volkszeitung in Leipzig studied last week’s reform package and described the glass as "half-full and not half-empty anymore." Psychologically that’s very important, the paper commented. "The boom is only being conjured up and no one has so far seen it. To an unemployed person in some East German region suffering from structural disadvantages not even the lowering of the wage level to that of the neighboring Czech Republic is any help," it concluded.

The Stuttgarter Nachrichten in Baden-Württemburg also put last week’s social reforms under the loop. "Whereas German Chancellor Gerhard Schröder and Economics Minister Wolfgang Clement earn ever more respect for their fireman-like appearance," the daily wrote, "the role of the opposition has become a risk for the reforms. It is unacceptable that they have threatened to reverse some of the changes in the legislative process." Much more important, according to the paper’s editors are other things, like the reform of the tax system. "One thing is clear," the daily concluded, "the health, employment and pension reforms would only produce results if taken together. And even then only if accompanied by a tax reform."