Overview

• The Scientific Advisory Board at the Economy Ministry says total social‑insurance contributions jumped to 42.5% on January 1 and could trend toward half of gross pay, posing a threat to competitiveness.
• Advisers recommend linking the retirement age automatically to life expectancy, applying wage growth only to lower pensions and inflation for higher ones, and abolishing or tightly limiting the penalty‑free pension at 63.
• The letter urges Reiche to stress in cabinet that rising federal transfers to social systems crowd out investment and weaken already low productivity growth.
• Business leaders at DIHK call for limiting benefits and more personal cost‑sharing in health and long‑term care, while economist Achim Truger argues the welfare state is a protective factor and backs higher taxes on top incomes and action against tax evasion.
• Negotiation ideas include a swap giving the CDU savings in social programs in return for SPD‑favored tax increases on higher earners, as advocates warn tighter activation rules and reduced housing support would leave vulnerable recipients worse off.