Reform proposal from DIW boss: Fratzscher: Germans should retire later

Lower taxes on wages and salaries, higher taxes on wealth: This is one of Marcel Fratzscher's proposals. The economic researcher believes fundamental reforms are essential to boost the German economy and make the pension system future-proof.

Marcel Fratzscher, President of the German Institute for Economic Research (DIW), has called on the next federal government to implement pension and tax reform. "Pension reform should ensure that pensions are not redistributed even more from young to old and from poor to rich," he told the "Rheinische Post" newspaper. "The retirement age must rise, and pension increases in the future must be lower so that the burden on the younger generation is not even greater," he continued.

"We also need immediate tax relief for both companies and low- and middle-income individuals so that the economy can get back on track in the short term," said the DIW President. "A fundamental tax reform requires relief for labor, which should be financed by reducing subsidies and tax privileges and by placing a greater burden on large assets."

Monika Schnitzer, chairwoman of the German Council of Economic Experts, also called for reforms from the incoming federal government in the "Rheinische Post" newspaper. "The most important areas of work are structural reforms of the pension insurance system to limit the increase in contribution rates, support measures to prepare the workforce of all age groups for structural change, and measures for the rapid and targeted recruitment and integration of skilled workers from third countries," she said.

"The task of the Minister of Economic Affairs will be to accompany and promote the energy transition in a way that minimizes bureaucracy and promotes competition, to further advance the reduction of bureaucracy, and to create the necessary conditions for a structural transformation that increases productivity," Schnitzer continued. "In order to set the course for the German economy to quickly regain momentum, it will be crucial that the future Ministers of Economic Affairs, Finance, and Labor work together effectively and in a spirit of trust."

Times are difficult enough, given the tariff conflict, the energy transition, and the necessary strengthening of technological sovereignty. "This calls for swift and quiet action," Schnitzer said. The Finance Minister must quickly present a draft budget "that utilizes the available financial leeway in a forward-looking manner and explores savings opportunities that do not slow growth and are socially balanced." The Labor Minister must address the effects of demographic change.