Germany plans to raise pension outlays by €60bn

German Chancellor Angela Merkel's government said on Thursday it plans to boost pensions by 60 billion euros ($81 billion) until 2020, sparking protests that younger generations will have to foot the bill. Under a key campaign pledge of the Social Democrats in Merkel's new "grand coalition", workers who have paid into the social security system for 45 years will be able to retire at 63 on full benefits, down from 65. Economists say this weakens a goal of slowly raising the retirement age to 67 in the fast-ageing country whose government has preached welfare reform and fiscal belt-tightening to embattled eurozone members. Under another costly measure in the draft plan -- this one a campaign promise of Merkel's conservatives -- pensions will also go up for mothers whose children were born before 1992. Leftist opposition lawmakers charged that the elderly would cash in at the expense of younger generations, whose pension payments and, from 2019, higher payroll taxes would pay for the extra entitlements. Greens Party parliamentary leader Katrin Goering-Eckardt said pension coffers were being plundered and asked "which straw ... do they plan to spin into gold to pay for all of this," referencing a German fairytale. The Merkel cabinet plans on January 29 to discuss the draft bill presented by new Labour Minister Andrea Nahles, a Social Democrat, and which is set to take effect on July 1. The two big governing partners together have an overwhelming majority in parliament. "With the pension package the grand coalition has hit the road at full throttle -- but unfortunately headed the wrong way," said a commentary about the weeks-old government on news portal Spiegel Online. "Just after the French president (Francois Hollande) has pledged new reforms for his country, Andrea Nahles is singing an entirely different tune, that of the grand coalition in Berlin: open the floodgates, we've got the money."