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German coalition parties wrestle over higher basic pension

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By Reuters

BERLIN (Reuters) – German Chancellor Angela Merkel’s conservatives and their centre-left coalition partners the Social Democrats (SPD) on Sunday tried to break their deadlock over a higher basic pension to avoid the government collapsing.

Senior coalition members, including SPD Finance Minister Olaf Scholz, convened for talks in the chancellery on Sunday morning, in a renewed effort to seal a deal which would lift the basic pension for low-income workers employed all their lives.

Merkel’s conservative CDU/CSU bloc and the SPD forged a loveless coalition in March 2018, ending months of political limbo following an inconclusive election.

To woo the SPD, the conservatives agreed to introduce a higher basic pension, or Grundrente, for people who have been employed for at least 35 years. But some of the details were left open and talks on finalising the terms are deadlocked.

The impasse is the last straw for some SPD members, worried by the party’s falling ratings. If no deal is reached on pension reform, they are likely to oppose staying in the coalition when the SPD decides on the issue at a congress on Dec. 6-8.

Asked in an interview whether the coalition government would last until the next regular general election in autumn 2021, Scholz, who is running for the SPD party co-leadership, told Bild am Sonntag newspaper: “Who wants to predict that?”

Scholz added that the government actually had to tackle more social challenges beyond raising the basic pension, for example abolishing the possibility for companies to hire people on fixed-term employment contracts without giving specific reasons.

Opinion polls show both Merkel’s Christian Democratic Union (CDU) and the SPD would lose seats in parliament if an election were held now. This provides both with a big incentive to find a compromise on pension reform.

(Reporting by Michael Nienaber;Editing by Elaine Hardcastle)