Germany has horrific demographics, and essentially won't exist in the same sense as it currently exists in 30 years time. It'll be a massive retirement community where everyone will be looking to get paid - millions of old Germans and millions of immigrants all looking for government money.
The government's plan is basically to YOLO it. Imagine if you knew you were broke, so you decide to max out your credit cards and put it all into the stock market hoping to get rich? That's exactly what Germany is doing.
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https://www.ft.com/content/21c2f283-be8c-45b1-ab2f-75aa4564bc8d
The German government will invest billions of euros in capital markets and use the proceeds to shore up the country’s embattled pension system, according to a draft law unveiled on Tuesday.
The legislation will see the creation of a fund for investing in stocks, backed by loans taken out by the federal government, that is forecast to be worth at least €200bn by the mid-2030s.
Proceeds from the investments will be used to keep the pension system stable and ensure that payments remain at 48 per cent of an average wage until the end of the next decade while avoiding steep increases in social security contributions. Finance minister Christian Lindner said the reform amounted to a “paradigm shift” in pension provision.
The plan is designed to alleviate pressure on a pension system that is expected to come under huge strain in the next few years as a whole generation of “baby-boomers” born in the 50s and 60s enters retirement.
Already the federal government has to subsidise Germany’s statutory pension fund to the tune of €110bn a year — almost a quarter of the entire state budget.
“The system must remain fair for future generations, for those who profit as pensioners and the others who finance the system,” Lindner said. “For that reason our pension provision requires an update.”
As a first step, the government will raise €12bn in debt this year and transfer it to the new fund, which will be managed by an independent public foundation. That amount will increase by 3 per cent annually and be augmented by proceeds from the sale of state holdings.
The finance ministry forecasts the size of the fund to reach €200bn by the mid-2030s and returns on investments will enable distributions of €10bn a year to the statutory pension fund from 2036. Finance ministry officials said the hope is Germany can ultimately move in the direction of Sweden and Norway where individuals can invest in capital markets within the framework of the state pension system.
https://www.ft.com/content/21c2f283-be8c-45b1-ab2f-75aa4564bc8dEven if this works out, €200 billion isn't worth a shit compared to the liabilities Germany has. #YOLO
At one stage a few years ago some people used to say that migrants would pay the pensions. If anyone actually ever believed that, they don't by now. Migrants have proven to be a massive net drain on government funds.