BERLIN (DPA, CONVERSEER) – Germans must work more and for longer, Vice Chancellor Lars Klingbeil said on Wednesday as he outlined his plans for reforming the struggling German economy.
“We are all called upon to give up old habits and break down barriers,” said Klingbeil, who also serves as finance minister and co-leader of the centre-left Social Democrats (SPD), the junior partner in Chancellor Friedrich Merz’s coalition government.
Merz’s conservatives and the SPD are aiming to agree on far-reaching reforms in the coming weeks, including in the key areas of taxation, health care, pensions and economic policy.
Klingbeil said he considers structural changes to be essential.
“We cannot respond to every crisis and every problem with even more money,” he said in Berlin at an event organized by the Bertelsmann Foundation, referring to billions in new debt recently taken on by the government.
The SPD leader said he wants to abolish existing tax breaks for married couples which disincentivize the lower-earning partner – overwhelmingly women – from working full time.
To encourage companies to hire more people despite uncertainty, there should be longer fixed-term contract options, Klingbeil said.
Regarding pensions, the government should base its calculations more on the number of years of contributions.
This would mean that people who start working later – for example, after completing their studies – would also retire later.
A reform of income tax should provide relief for 95% of workers, said Klingbeil. “And a noticeable one at that, amounting to several hundred euros a year.”
In return, high earners and those with substantial wealth would have to “make a contribution,” he said.
