Germany's government-in-waiting is considering a proposal to increase the statutory retirement age to 67 from 65, in a move that, if agreed, could send a reform signal across Europe but would stir a backlash from welfare and pensioners' groups in Germany.

Officials close to the coalition negotiations between the Christian Democratic Union and the Social Democrats said the proposal to raise the retirement age - to tackle rapid population ageing and spiralling pension costs - was under discussion. CDU officials said an outline deal had been agreed in across-party working group on pension issues, but an SPD official said that his party still had concerns about the proposal. He said a final agreement was possible before November 12, when the talks are expected to be completed.