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German pension system is on the verge of collapse due to lack of funds

German pension system is close to collapse due to lack of funds, says Oliver Moody, a columnist for the British newspaper Times.
German pension system is on the verge of collapse due to lack of funds

“The German state pension system is on the verge of collapse, and since life expectancy does not stop growing, the retirement age will soon have to be raised,” the journalist said.

The author of the article clarified that 22 percent of the European population are people over 65 years old. This demographic group is expected to grow in the near future, which will lead to a decrease in injections into the social insurance system and an increase in payments.

German economists had warned the Bundestag that the “generous” pension system could collapse in the absence of economic reforms, but their forecasts were rejected, the publicist emphasized.

The president of the Confederation of German Employers' Associations Rainer Dulger suggests that the pension system will collapse in the next five years if the authorities fail to stop the trend of large payments: according to German law, pensioners receive 48 percent of the average wage.

“There are 50 retirees for every 100 employees who pay contributions to the pension fund at the moment; there will be 70 of them in 15 years,” Dulger noted. According to him, this topic is considered something of a taboo for the German government. The collapse likelihood increases the difficulty of reforming the pension system.

Western countries are facing rising energy prices and inflation outburst due to imposition of sanctions against Moscow and policy of abandoning Russian fuel. After the rise in fuel prices, primarily gas, the European industry largely lost its competitive advantages, which affected many economic sectors. Germany and other EU countries are experiencing record inflation in decades.

Source: https://ria.ru/20221031/germaniya-1828155759.html

Photos are from open sources.

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