Germany prepares for austerity

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BERLIN, Dec. 25 (UPI) -- Recommendations by the German Finance Ministry point to a drastic increase in taxes and a cut in social services, an analysis says.

Although the government and the opposition in 2013's elections are pledging higher benefits for pensioners, families and the long-term unemployed, Finance Minister Wolfgang Schauble is planning cutbacks to prepare for a weakening economy, the German magazine Der Spiegel reported Tuesday.

The European debt crisis is prompting the planning of an austerity budget, and finance officials are scrutinizing subsidies, entitlements and other welfare benefits worth tens of billions of euros, the magazine said.

Schauble's team envisions encouraging Germans to work past the official retirement age of 67 to counter a labor shortage, and intends making retirement less attractive by removing "inappropriate incentives" -- the advisers wrote in a position paper -- by reducing pension payments.