Germany's Looming Pension Apocalypse

Germany is headed towards a pension apocalypse driven by demographic decline. In the coming years, our population of pensioners will balloon relative to the working population funding those pensioners. This is a disaster that has been in the making for decades, and there is no longer any solution to it.

The worst crises are the boring ones, which in their banality cede the stage to a rotating cast of insignificant passing hysterias. We have had many years of freakout about fake apocalypse scenarios. An entire generation of schoolchildren grew up terrified about the possibility first of a nuclear apocalypse and then of a carbon dioxide apocalypse. The fleeting hysteria of a virus apocalypse interrupted these fever dreams, after which our rulers told us horror stories about the geopolitical threat of Russia and the domestic threat of a feverishly imagined fascism. Throughout all of these individual hysterias, the real apocalypse has been the pensions.

As apocalypses go, this one is very simple: In 1960, six German workers supported every pensioner. After reunification in the early 1990s, that ratio fell to about three. Today, it is around two, and by 2050 it will stabilise at around 1.3. Things are not nearly as bad as they will be, and still today 25 cents of every Euro collected in taxes is spent to keep the pension system afloat. This is in addition to the mandatory annual contributions from 35 million workers, which in 2025 will total around 300 billion Euros. These numbers will get worse and worse, until the Federal Republic becomes a Pension Republic – a strange political form in which the state will finance the life of pensioners from the earnings of workers in an almost one-to-one ratio. In this world, state services, infrastructure projects, national defence and everything else will take a backseat to the terrible burden of pension funding, while most individual pensioners – despite the incalculable costs – will receive monthly allowances ranging from the extremely bleak to the very modest.