Germany risks once again being labeled the “sick man of Europe” if it fails to rein in public spending, Allianz CEO Oliver Bäte warned at the company’s annual media briefing. Bäte forecast the collapse of the country’s social security system within ten years unless reforms are made, pointing to spiraling healthcare costs and stagnant GDP growth as key threats to long-term stability.

Social Spending, Pensions At The Breaking Point

Oliver Bäte said Germany is heading toward a fiscal crisis similar to the late 1990s, despite lower unemployment figures today. “We’re back to where we were in 1997,” he stated, citing excessive healthcare and welfare expenditure growing at 6–8% annually. Without corresponding economic growth, he warned, Germany’s pension and welfare systems will become financially unsustainable.

“Our pension system is not functioning and we need high returns,” Bäte said. Economists have issued similar alarms over looming pension deficits as Germany’s baby boomer population moves into retirement. Despite relatively modest overall social spending growth compared to other OECD countries, the system’s imbalance remains a serious concern.

Caution On Markets And Overvalued Tech

The Allianz chief also expressed skepticism about current equity markets, particularly high U.S. tech valuations. “Do we really believe a company like Nvidia is worth $4tn? Or Tesla?” he asked, cautioning against overexposure to such stocks. Though he stopped short of offering direct investment advice, Bäte suggested investors and institutions should be “more careful” amid growing market volatility.

As head of one of Europe’s largest insurers and the parent company of asset management giant Pimco, Bäte is known for provocative economic commentary. He has previously called for higher inheritance taxes and tighter control of sick leave entitlements.