German parliament gives approval to pension package following a rebellion in Merz's party

BERLIN On Friday, Germany's lower house of parliament approved a new pension reform package that had stirred dissent within Chancellor Friedrich Merz's party, marking another challenge in his early months in office. The legislation passed with 319 votes in favor and 225 against, while 53 lawmakers abstained.

One contentious provision keeps state pensions at 48% of average wages until 2031. A group of 18 young lawmakers in Merzs center-right Union bloc opposed a clause stating that pensions would rise slightly above current levels after 2031, arguing it could cost up to 15 billion ($17.5 billion) annually, potentially burdening younger generations.

Merz's coalition partners, the center-left Social Democrats, insisted the package be adopted without changes, and Merz supported them. The legislation also includes measures favored by his conservative bloc, such as tax incentives to encourage retirees to remain in the workforce.

To address concerns, coalition leaders announced that a commission would draft proposals for a more comprehensive pension overhaul by mid-2026, as Germany faces challenges related to an aging population.

Merz aimed to secure approval through an absolute majority of the 630-seat parliament, avoiding reliance on opposition abstentions. The outcome helped him demonstrate control over his coalition, reducing the risk of embarrassment.

The chancellor has sought to prevent the internal conflicts that weakened his predecessor Olaf Scholzs government, although his coalition has experienced high-profile disputes, including over a center-left judicial nominee who eventually withdrew. Merz has admitted that his government has engaged in too many public discussions since taking office, while public support for both him and his administration remains low, coinciding with a rise in backing for the far-right Alternative for Germany since the February election.

Author: Ava Mitchell