No state can be run on special funds alone – an efficient capital market is needed

In view of today's vote in the German Bundestag on special funds, Deutsches Aktieninstitut calls for strengthening the capital market. To improve the competitiveness and sustainability of the German and European economy, an efficient European capital market is needed. To achieve this, decisive reforms are required in Germany and the EU.

‘Investments in transformation, innovation and competitiveness cannot be financed by state funds alone. For investments in the future, we need an efficient European capital market,’ explains Henriette Peucker, Chief Executive of Deutsches Aktieninstitut.

At the European level, Deutsches Aktieninstitut proposes that the EU call on the member states to invest an annual volume of two per cent of wages and salaries in building up a capital stock in the statutory pension system. Experience from other countries such as Sweden or the US shows that the design of pension systems and capital formation has a decisive influence on the development of the capital market. Implementation and design is a matter for the member states.

In addition, the regulatory framework needs to be simplified to give companies easy access to financing opportunities on the European capital market and to facilitate access to investors.

Last week, Deutsches Aktieninstitut presented a position paper on this topic,‘Strengthening Europe, Accelerating the Union of Savings and Investment’.

‘The people in Germany should finally be able to benefit from the profitability of shares, equity funds and other capital market investments. Their use in all three pillars of the German pension system should therefore be at the top of the new federal government's list of priorities,’ explains Peucker.