Just in time for the 25th anniversary of the fall of the Berlin Wall, Chancellor Angela Merkel has finally promised eastern Germans parity for state pensions. Nearly a quarter of a century after unification, this remains the only area where East and West Germans are treated differently legally.
The chancellor’s announcement that pensions parity will be reached by 2020 at the latest is very popular and is likely to make voters in the upcoming eastern state elections in Saxony in August and in Thuringia and Brandenburg in September favorably disposed to vote for her Christian Democrats.
But the popularity of this effort masks a basic misunderstanding about what the German division of statutory pensions is all about. The widespread belief – one now enthusiastically cultivated by Mrs. Merkel – is that the eastern German retirees were worse off than their western German cousins because lower wages in the formerly communist east resulted in lower pension entitlements. Yet exactly the opposite is true.