Germany’s finance minister Christian Lindner is in favour of creating the right platform to boost Pensionskassen’s investments in the real economy, calling on pension funds to invest in domestic growth.

“What we have to create is an environment that allows insurance companies and Pensionskassen in Germany to no longer just invest in government bonds, or just in stones, for example real estate, [so] that they can also invest in infrastructure and business ventures,” he said speaking at the liberal party’s (FDP) conference held in Berlin last weekend.

The finance minister believes that Germany needs another Future Financing Act (Zukunftsfinanzierungsgesetz) law, after the one approved last year, to mobilise private capital.

The Future Financing Act, a pillar of the government’s start-up strategy, lowered the market capitalisation threshold for an IPO to €1m, to encourage the listing of start-ups and small and medium-sized companies.

Germany has a “competitive disadvantage” compared to the US because of a lack of capital markets for private investment, said Lindner.

“[[n the US] there is a capital market culture. Across society, people invest in companies. [There] the retirement system is based on the strength of your own economy. We also have to go in this direction,” the finance minister added.

Lindner’s liberal party FDP is demanding a change on the economy (Wirtschaftswende), as Germany is “currently not competitive [and] the economy is stagnating like in no other industrial country”, according to decisions taken by party’s members at the conference.

FDP’s demands also resonate with the plan laid out by the UK’s chancellor of the exchequer Jeremy Hunt to unlock up to £75bn investment from defined contribution (DC) and Local Government Pension Schemes (LGPS) to support the country’s economy.

Former Italian prime minister Enrico Letta has suggested in a recent report to create a Savings and Investments Union in Europe to unlock €33trn of private savings to fund the bloc’s strategic goals, in light of private savings amounting to €300bn landing in the US, and in the hands of US asset managers, every year.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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