The ruling Grand coalition in Germany agreed to gradually increase the pensions of those who worked in the former communist East Germany to reach the level of those in West Germany. This will happen in the period 2018-2025, according to the memorandum points of the meeting of the leaders of the conservative Bavarian Christian Social Union (CSU) and the German Social Democratic Party (SPD), which is junior partner in the coalition.
The agreement also includes an agreement for a quick implementation of already agreed pension reform gradually raise the retirement age to 65 for both genders. According to preliminary estimates, the alignment of pensions will cost at least 6-8 billion EUR for the German budget.
The pension agreement comes at a time when the parties in the Grand coalition in Germany led by Merkel prepare for the regular parliamentary elections in September next year after a series of defeats inflicted by the new anti-immigrant populist party Alternative for Germany, which is gaining more supporters in the former East Germany.
The coalition parties still said they did not want to lead the election fight with competing pension promises. The dispute overcome the biggest difference in pensions between East and West Germany was an insurmountable obstacle to the development of society there for many years.
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