Pressure on Merz as German employers back rebels on pension reforms

German employers' representatives are demanding that the government's controversial pension reform package be modified, piling further pressure on Chancellor Friedrich Merz as he seeks to hold his coalition together.

Rainer Dulger, president of the Confederation of German Employers' Association (BDA), told the Employers' Day summit in Berlin on Tuesday that "Cabinet decisions can be changed."

"If they are wrong, the parliament must change them," he added.

Merz's Cabinet has approved a bill to tie average pension levels to wages until at least 2031, fulfilling a pledge from the coalition agreement between his conservative bloc and the centre-left Social Democrats (SPD).

But the conservatives' youth wing has come out against the measure, putting at risk the coalition's majority in the Bundestag, Germany's lower house of parliament.

The rebels have received backing from economists and business leaders, with Dulger warning that the bill would amount to "sinning against the next generation."

Merz and the SPD have refused to back down, insisting on bringing the measure through parliament in December.

The chancellor, as well as Labour Minister Bärbel Bas, are due to appear at the Employers' Day later on Tuesday.

Dulger also called for the retirement age to be lifted. "As people live longer, the standard retirement age must also be gradually raised," he said.

Given Germany's shortage of skilled workers, there should also be no more early retirement, the employers' representative added.