Coin Press - Germany and its outdated pension system

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Germany and its outdated pension system




With politicians focussing on poverty in old age, many are calling on the German government to reform the pension system. But how serious really is the situation?

Germany must reform its pension system!
In the midst of an ageing society and changing labour markets, the Federal Republic of Germany is facing one of its greatest socio-political challenges: the urgent need to reform its pension system. Without timely and well-thought-out adjustments, there is a risk of financial bottlenecks and social injustices that could endanger the stability of the social system.

Demographic change as the main driver
Demographic change is indisputably the main factor putting pressure on the German pension system. The birth rate has been low for decades, while life expectancy continues to rise. This trend is leading to an ever-widening imbalance between contributors and pension recipients. According to forecasts, by 2035 almost one in three Germans will be over 65 years old. This ratio calls into question the financial viability of the pay-as-you-go pension system.

Financial sustainability at risk
The growing number of pensioners means higher expenditure for the pension funds, while income from contributions could stagnate or even fall. Without reforms, either contributions would have to be increased significantly or pension benefits cut – both scenarios that could cause social tensions. In addition, the burden on the federal budget is growing, as it already provides significant subsidies for pension insurance.

Changes in the world of work
Digitalisation and globalisation have fundamentally changed the world of work. Permanent full-time jobs are becoming rarer, while part-time jobs, solo self-employment and fixed-term contracts are on the rise. These forms of employment often lead to lower pension entitlements and increase the risk of poverty in old age. The current pension system is not sufficiently prepared for these new realities.

Intergenerational justice
Without adjustments, future generations could face a disproportionate burden. Today's young workers are financing the pensions of today's pensioners, while it is unclear whether they themselves can count on a comparable level of pensions in old age. Reform is therefore also a matter of intergenerational fairness.

Necessary reform approaches
- Increasing the retirement age
A gradual increase in the retirement age, adjusted for rising life expectancy, could relieve the pension funds. Strengthening private and occupational pension provision: Additional pension provision could be encouraged through tax incentives and information campaigns.

- Making retirement more flexible
More individual models could enable employees to retire earlier or later depending on their life situation. Integrating new forms of employment: Adjustments are needed to provide better protection for the self-employed and those in atypical employment.

- Promoting female employment
By making it easier to reconcile family and career, the employment rate can be increased, thereby attracting more contributors.

Conclusion:
Reforming the pension system is no easy task and requires courageous political decisions and a broad social consensus. However, it is indispensable to ensure financial stability and social justice in Germany. Now is the time to act in order to guarantee future generations a reliable and fair pension system.



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South Korea in Crisis: President Yoon Suk Yeol's Coup Shakes the NationIn a stunning and unprecedented move, South Korean President Yoon Suk Yeol has attempted to seize absolute power, plunging the nation into political chaos. On the night of December 3, President Yoon declared martial law, suspended the National Assembly, and deployed soldiers to surround its premises, effectively paralysing the country’s democratic institutions. The world is watching in shock as one of Asia’s most stable democracies faces an uncertain future.The Coup: A Nation in ShockThe events unfolded rapidly on a cold December night, leaving South Koreans and the international community reeling. President Yoon cited national security threats and alleged internal dissent as justification for his actions, but critics are calling it a blatant power grab. By suspending the National Assembly—South Korea’s legislative body—Yoon has undermined the very foundation of the nation’s democratic system.Eyewitnesses reported heavy military presence in the capital, Seoul, as soldiers and armoured vehicles took positions near government buildings. Communication networks were temporarily disrupted, adding to the confusion. The swift and calculated nature of the coup suggests months of planning, raising questions about who within the government and military may have supported the move.Immediate Reactions: Outrage and ResistanceThe coup has sparked widespread outrage among South Koreans. Protesters took to the streets in major cities, waving banners and chanting slogans calling for Yoon’s resignation. Opposition leaders condemned the move as a betrayal of the democratic values South Korea has upheld since its transition from military rule in the 1980s.International leaders, including the US-President Joe Biden who is still in office until 20 January 2025 and Japanese Prime Minister Fumio Kishida, have expressed grave concern. The United Nations has called for an emergency session to address the situation, while human rights organisations warn of potential crackdowns on dissent.What Led to This Crisis?President Yoon’s tenure has been marked by polarising leadership and a growing divide between conservatives and progressives. Critics argue that his administration’s inability to address pressing economic challenges, such as rising housing costs and youth unemployment, eroded public trust. Yoon’s approval ratings had plummeted in recent months, and his administration faced mounting scrutiny over alleged corruption scandals.While Yoon’s justification for the coup includes vague references to national security threats, experts believe the move was motivated by a desire to cling to power amidst growing opposition. Some speculate that internal disagreements within his party and the prospect of impeachment may have pushed Yoon to take drastic action.The Role of the MilitaryThe military’s involvement in the coup is particularly troubling for a country with a history of authoritarian rule. South Korea transitioned to a democracy in 1987 after decades of military dictatorship, and the armed forces have since remained apolitical. Yoon’s ability to mobilise the military raises questions about divisions within the armed forces and whether dissenting voices exist among its ranks.Should significant portions of the military oppose Yoon’s actions, the possibility of a counter-coup or internal conflict could further destabilise the nation.Implications for South Korea’s FutureThe attempted coup casts a shadow over South Korea’s hard-earned reputation as a thriving democracy. Its political stability and economic strength have made it a key player in the global arena, but this crisis threatens to derail decades of progress.Domestically, the suspension of democratic institutions could lead to widespread unrest, civil disobedience, and a protracted power struggle. Economically, investor confidence is likely to plummet, jeopardising South Korea’s status as a global technology and trade hub.On the international stage, the coup could strain alliances, particularly with the United States, which has long regarded South Korea as a crucial ally in countering North Korea and maintaining regional stability. China and North Korea, meanwhile, may view the situation as an opportunity to exploit South Korea’s weakened state.The Road Ahead: Democracy or Dictatorship?The fate of South Korea now hinges on the response of its citizens, political leaders, and international allies. Opposition parties have called for immediate action to restore democracy, including mass protests and legal challenges. Meanwhile, world leaders face the delicate task of pressuring Yoon’s government while avoiding escalation.The unfolding crisis serves as a stark reminder that even the most established democracies are not immune to authoritarian tendencies. For South Korea, the road ahead is fraught with uncertainty, but its people have shown resilience before. Whether the nation emerges from this crisis as a stronger democracy or succumbs to authoritarian rule will shape its future—and its place in the world—for generations to come.

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