Inane Step in Wrong Direction: Germany Plans to Lower Retirement Age for Some Workers From 65 to 63

With people living longer and longer, and with Germany forcing higher retirement ages on Greece and Spain, lowering the retirement age in Germany for any set of workers makes no sense whatsoever. Yet, that is exactly what's slated to happen.

Wrong Signal

The Financial Times reports Germany Attacked Over Plan to Cut Retirement Age.

Speaking to national paper Die Welt, Günther Oettinger, German EU commissioner, said that Germany’s plans to allow longer-serving employees to retire at the age of 63 sent the “wrong signal” at a time when countries like Greece, Spain and Portugal are struggling to introduce tough labour market reforms.

“We expect Greeks to work longer for less pay,” said Mr Oettinger. “They are now wondering that Germany is going in the other direction.”

Warning that the eurozone’s largest economy faces a skills shortage, the EU energy commissioner said that politicians should start to talk instead about a retirement age of 70 and help equip people with professional training for a longer working life.

Greece and Spain have agreed to raise their retirement age from 65 to 67, while Portugal recently pushed its retirement age up to 66.

Under draft laws set to come into effect in July, people who have worked at least 45 years since the age of 18 will be allowed to retire at 63 with a full state pension. The official age of retirement in Germany is in the process of being raised from 65 to 67.

Economists at Deutsche Bank estimate the total cost of the coalition’s pension reforms will total €230bn by 2030 and have warned that the burden of paying for people in retirement will fall on the country’s younger generation.

Demographically Speaking

From a demographic standpoint, with fewer and fewer workers supporting retirees whose lifespan  and medical costs continually rise,  the change is as puzzling as it is ludicrous.

Note: 

Some people reported the Greenwald interview Youtube link in a previous post "was taken down". I am  not sure why but I found a replacement: Greenwald Interview:

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com