German finance minister Olaf Scholz warns of 'German Trump' if pensions reforms not backed by Merkel

Mr Scholz has brought pensions centre stage in his quest to carve out new territory for the SPD - AFP
Mr Scholz has brought pensions centre stage in his quest to carve out new territory for the SPD - AFP

Germany's finance minister warned that a "German Trump" may seize power as he claimed pension reform is the key to preventing the rise of populism in Europe.

“Stable pensions prevent a German Trump. That's why politicians should not shirk this topic,” Olaf Scholz, who is also vice-chancellor, said yesterday.

Mr Scholz has been pushing for government reforms similar to the UK’s triple lock to ensure pension levels remain stable despite inflation.

The vice-chancellor has something of a reputation for dullness in Germany, but he insisted the issue has implications that go far beyond his brief as finance minister.

“The way I see it is this: globalisation and digitalisation create wealth, but they are also changing our world at a fast pace,” Mr Scholz told Bild am Sonntag newspaper in an interview. 

“Citizens rightly expect us to do everything we can to make sure they live securely. If we do not do that, then the hour of nationalist populism will have struck.”

Profile | Angela Merkel

Mr Scholz has brought pensions centre stage in his quest to carve out new territory for his centre-Left Social Democrat party (SPD), which is junior partner in Angela Merkel’s coalition government.

Mrs Merkel has agreed to secure pension levels until 2025, but Mr Scholz wants them guaranteed until 2040 and has threatened to make them a major issue in 2021’s election.

After recording its worst ever results in last year’s election, the SPD leadership is desperate for an issue that will allow the party to differentiate itself from Mrs Merkel’s Christian Democrats (CDU).

The SPD has continued to sink lower in the opinion polls, and at times has slipped behind the nationalist Alternative for Germany party (AfD). 

A new poll showed that the conservatives had lost one percentage point to poll at 30 percent, while the SPD was steady at 17 percent. That means that if Germany voted again tomorrow, the grand coalition would not have enough support to govern.

The poll, conducted by the Emnid institute, showed the anti-immigration Alternative for Germany (AfD) party gaining one point to 15 percent, and the pro-business Free Democrats adding one point to poll at 9 percent.

But Mr Scholz insisted the SPD leadership was not panicking. “We are in this for the long haul and have to keep cool,” he said. “If we show a clear attitude and do the right thing over the long term, the people will feel comfortable with the idea of an SPD chancellor in 2021.”

The finance minister has also pledged to push for EU reforms to reduce the amount of child benefits Germany has to pay to children living in other member states.

Under EU current rules member states have to pay child benefits to anyone who is legally resident, even if their children live in another country. Germany currently pays benefits for more than 260,000 children in other EU countries.

Mr Scholz  wants the rules changed so the level of benefits is linked to the cost of living where the children are resident.