BERLIN (AP) — Germany’s Cabinet on Wednesday approved a 4.57% increase in retirees’ pensions starting this summer, well above the current inflation rate.
German pension increases are largely linked to wage developments. Although inflation has declined over the past year, the outcome of recent wage negotiations in several sectors has reflected demands for substantial wage increases following a large increase in the cost of living.
The increase will take effect on July 1, the first time since 2000 that pensions in Europe’s biggest economy have increased by more than the annual inflation rate, which in March was 2.2%, German news agency dpa reported. .
An increase last year of 4.39% in the former West Germany and 5.86% in the less prosperous and formerly communist East completed efforts to raise pension levels in both parts of the once-divided country, more than 20 years after the reunification.
Germany has a population of 84 million inhabitants, including more than 21 million pensioners.
