Proposal requested for a directive on commission's mandate regarding specific subject matter
In a recent statement to the Funke media group, economist Veronika Grimm called for a reassessment of benefit provisions in Germany's pension, long-term care, and health insurance systems. Grimm emphasised the need for greater transparency regarding the affordability of benefits and expressed concern that recent political commitments may undermine the long-term fiscal sustainability of these systems.
The economist's comments come in response to the reform of the care insurance system, which is aimed at addressing significant deficits in the care funds. The reform, which includes improvements in the care insurance system paid for with tax money, will result in slightly higher costs for employees and employers.
One of the changes in the reform is an expansion of the mother's pension, which will mean pensions will be permanently higher than without the reform. However, Grimm disagrees with this decision, stating that it will burden the federal budget and increase wage-related costs. Currently, wage-related costs are at 42% and may rise to 45% by the end of the legislative period.
Grimm also argues that reductions in benefits for long-term care may be necessary to ensure fiscal sustainability. She believes that individuals with financial capacity should bear part of the costs themselves, and rejects proposals for comprehensive public coverage in long-term care. The economist stresses the importance of monitoring ancillary labor costs, which she notes are already high and expected to increase, potentially affecting employment incentives.
In addition, Grimm opposes the pension cap at 48% of average income until 2031, stating that it won't be sustainable in the long run. She believes that the federal government still hasn't understood the seriousness of the financial situation and is making promises about benefits that can't be kept, which may discourage private savings among those who can afford to save independently.
Grimm's comments highlight the need for prudence and structural reforms in social insurance systems to address the growing financial burdens. She calls for a more honest approach to the benefits that can be afforded in these systems, and for greater focus on long-term fiscal sustainability rather than overly generous public commitments without corresponding fiscal discipline.
Grimm advocates for a reevaluation of the community policy regarding pension, long-term care, and health insurance systems, suggesting more transparency on the affordability of benefits and expressed concerns about the potential impacts of political commitments on their long-term fiscal sustainability. In her proposed reforms, she emphasizes the prioritization of vocational training to enhance the health-and-wellness, finance, and business sectors for long-term prosperity.
