Group of European Pensioners from Savings Banks and Financial Institutions


Index of documents > Euromeetings Magazine > Euromeetings Number 8

THIS is exactly what is going on in Germany: there is a lack of flour to make bread. The Treasury –and all the bodies, which depend on it: Federal State, Federal Regions and municipalities– have only debts. And those of the municipalities are huge. It lives only thanks to a miracle: due to the yearly taxes, which are fewer than on good times, due to the high rate of unemployment and due to the fact that unemployed do not pay taxes. Moreover, they receive an unemployment benefit from the Federal Employment Office. But in the case this one has no funds, it will get the money from the Treasury.


Today’s topics are retirement and illness insurances. Retirement insurance is based on the “generation agreement”: renters are paid by nowadays’ workers, who will become pensioners t their due time. But the demographic factor has blown down this structure. The demographic factor is the product of three different unquestionable facts: a strong deficit in the number of births, the ageing of the population and the increase of life expectancy - today’s average is 80 years old: soon two renters will depend on three workers. The “Riester Reform” tried for a couple of years to fight against these facts, but it was not enough and it was extremely complicated.


There is a lot of polemic nowadays about the “reform of the reform”. What ever it might happen, the monthly contribution to the assurance should not be less than 20% of the gross salary, so that the payment of “its part” does not disturb enterprises, specially those of middle-volume incomes, for competition on export. It seems that this new neo-liberal way of thinking will be more important than ago: “first thing, money (less cynical: economy) and the rest should take care for themselves. Anything else is only a sentimental protection of losers and parasites, dressed up as social solidarity”.


In order not to overcome this 20%, which on good times was 70% of the salary, pensions were reduced by the Riester reform to 64%; today we are talking about 40% and there are rumors of arriving to 34%. For those who enjoyed a good salary, the shock is strong. But for those who had a modest or little salary this means to fall into poverty. To fall into social aid.


To avoid this terrible future, every worker should pay for a private insurance during his working life. To tighten one’s belt is uncomfortable but effective, but only if there is any belt to tighten... For modest and little salaries, which are only worth to live on – to survive, to pay an insurance to reach the “surviving pension” of 40% is something completely unaffordable.


Reform plans want to increase the retirement age from 65 to 67 in order to increase pensions’ worth without increasing contributions. We might then get something, but not much and we would still have some inconveniences: even more pressure for the renter and a longer delay for youth to get a job. But the worst would be for the unemployed: they would never reach the required years of work. Germany has today five million unemployed people. Most of them are not to be “recycled”, there is no hope for them to come back to the working market.


This lack of money is not only in the pensions sector reflected. It is reflected in illness insurances as well. In the case that reform plans are taken, the normal citizen, insured in general insurance companies will have to pay, in addition to his monthly contribution, a part of his medical consults, a part of his recipes and an important part of the expenses of the hospital stay, something very unaffordable for an average citizen. And even worse: the illness insurance –according to the reform, will do nothing for dentures, will should be paid completely. Those who can not afford it will wear the sign of his social and economic status on their faces until they die. Reform commission experts expect poverty to increase during the old age (according to the last official statistic in 1998, nearly a 17% of renters live under the poverty threshold, that is, under 50% of the average salary).


All these “cruel facts” are being commented by a public opinion that is resigned and incapable of doing something. Population admits the falling down of the “social” welfare and the solidarity principle is substituted by: “you have to save yourself. The rest does not matter.” The situation is tense and obvious for everyone. Expert commissions that have planned the reforms say nothing but there is no flour to make bread.


And certainly there are reasons for this unease. We are living a dismantle of the “social” welfare, no doubt. But we have to discuss if there is a possibility of other ways to get out of here. Possible answers to this question are too difficult for the general audience, who let a well disguised and irresistible propaganda convince themselves. The average citizen has accepted the neoliberal dogma - in fact it is a religious faith of the one believing without having seen -: there is no other way but “not to care about the rest”. The solidarity society has been buried. And another fundamental idea is lost: economy is there for the human being - all human beings, and not the other way round. What is a society worth for, if it is guided by the law of the jungle? We were then in the right place when we were in the jungle.


Maybe I should mention here that for years, the first half dozen of big consortiums pay no taxes in Germany or only a ridiculous million since they become most of their earnings from abroad. Consequences of a policy which does not take into account those “facts” will be “staff reductions” done by the Federal Employment Office. If these strong shoulders, among many others, would carry the flour corresponding to them, the unease will be, obviously and in proportion, quite less significant.



                                                                                                                                            Eduardo Espert (Bonn)