<i>&gt; The underlying problem Germany has is the population dynamics.</i><p>Actually the fact that wages stopped rising along with the economy as a whole (e.g. less of the generated profits get payed out as wages) seems to play an important role, too.<p>The retirees represent a cost in absolute numbers (e.g. they are entitled to pension benefits of a certain size). The workforce is collectivly paying out the retirees with a <i>share of their income</i>.<p>That system works fine even with a declining retiree&#x2F;workforce ratio (which actually shrinks since at least the 1960s) as long as real wages continue to grow along with GDP and productivity.<p>Which they don&#x27;t, and that&#x27;s a problem.