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Germany faces crisis due to demographic problems

Germany faces crisis due to demographic problems

Germany is now facing an unprecedented triple crisis and has severe problems with demographics, the workforce, and the pension system, Christian Durr, leader of the FDP party in the Bundestag said in an interview with WirtschaftsWoche.

According to Reuters, the country's fertility rate is 1.54, well below the figure of 2.1 required to sustain the current population level. The birth rate in Germany has remained at this level for the past 10 years.

The resulting labor shortage has been detrimental to the German economy. According to the German Economic Institute, the country’s labor force would decline by more than 300,000 people this year. In 2029, the gap is expected to widen to more than 650,000. The accumulated shortage of people of working age is projected to reach 5 million in 2030.

The German government sees the solution to the crisis in bringing 400,000 skilled foreign workers per year. According to Christian Durr, only a smart immigration policy would resolve the labor shortage.

The shrinking labor force is putting pressure on the public pension system. Fewer employees are burdened with the task of financing the pensions of a growing mass of retirees who are enjoying longer life expectancy.

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