The coalition parties ruling Germany are faced with an onerous task of coming to terms on a wide range of issues after one of them issued an ultimatum.

Germany's Finance Minister Christian Lindner, also chairman of the Free Democratic Party (FDP) which is one of the three coalition parties, demanded last week that final decisions must be made by the end of autumn on a host of issues including migration, economic growth and the budget for 2025, according to the German public broadcaster ZDF.

Among other issues, the pension scheme on which the three parties are split has become a sticking point, shedding light on a long-term worry that the aging population in Germany is posing a great threat to the economic prospect of the country.

In a parliament debate about the pension earlier this month, the Social Democratic Party (SPD) differed from FDP. The Labor and Social Affairs Minister Hubertus Heil argued that many people in the country would have to rely solely on the statutory pension and it was the government's obligation to provide security to pensioners.

If the government chooses to increase the contributions of the working people to stabilize pensions, it will inevitably exacerbate the burdens on people and diminish the appeal of Germany as a destination to do business, said some FDP representatives at the parliament.

A study by the German Council of Economic Experts published in February identified "diminishing labor volume" as one of the main factors which will lead to low economic growth up to 2070.

"Our results highlight the significance of demographic factors in shaping economic trajectories and the critical need for policy interventions to mitigate adverse effects," said the economic experts in the study titled "Demographic aging and long-run economic growth in Germany."

Aging, together with underinvestment and bureaucracy, is one of the real challenges for Germany, an IMF report published in March said.

The working-age population in Germany is expected to decline by more than 0.6 percent in the next five years, the worst among all the G7 countries, according to the report.

"This will put downward pressure on GDP per person because there will be fewer workers for each retiree. It will also lead to a combination of higher social security contributions and lower pensions, absent reforms."

The German government enacted the Skilled Immigration Act in November 2023 to encourage foreigners with vocational training to take up skilled jobs in Germany.

The Federal Ministry of the Interior and Community has described skilled immigrants as "an asset to our country."

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