Germany To Raise Pensions for 20 Million

Chancellor Angela Merkel's Cabinet approved an increase in state pensions for this year and next, realizing a pledge to boost spending power for about 20 million retirees in Europe's most populous country. Pensioners will receive a 1.1% raise this year and another 2% next as they benefit from the suspension of a mechanism that damps the size of increases, the Labor Ministry said. That's equivalent to as much as $21.30 more per a from July 1. The step will add about 3 billion euros to the federal budget, a ministry spokesman, Christian Westhoff, said. The increases are aimed at giving pensioners a "bigger share of economic growth," the minister of Labor, Olaf Scholz, said in a statement. The move, backed by the Cabinet meeting in Berlin today, "will send a signal to the elder generation that we respect their contribution to the economy and want to avoid creating a rift in society."