Catherwood LibraryILR School

The association of Germany's government-run pension funds (VDR) will warn tomorrow of an impending shortfall in pension funding, in a clear sign that Germany has not escaped the pension problems sweeping through other European countries (see WIT's for March 5, Feb. 18 and 4, and Jan. 13, 2003, and Nov. 25 and Sep. 16, 2002), the U.S. (see today's WIT and WIT's for March 3, 2003, and Dec. 10, 2002), and Japan (see WIT for Feb. 19, 2003). Caused by continuing economic weakness, the deficit will require a nationwide $3.8 billion increase in mandatory contributions to the pension system from employers and workers, and could not have come at a worse time for German Chancellor Gerhard Schroder. The contribution increase will likely undermine a speech calling for decreases in employers' non-wage labor costs Mr. Schroder is to make before Germany's parliament on Friday as he struggles with a continuing weak economy and labor market.