Germany’s pension reform is only the start

The new “generational capital” is only a homeopathic supplement.

The German government wants to strengthen the pay-as-you-go public pension system with the so-called generational capital. The creation of a funded component is intended to help finance pensions as the baby boomers are nearing retirement age. This capital-funded pillar is long overdue, as the pension system, burdened by a rapidly ageing society, is creaking at the seams.

"However, generational capital is not enough to turn the tide," says LBBW Chief Economist Moritz Kraemer. "It comes too late and is too small."

Read the latest LBBW To the point to find out which reforms urgently need to be added to the political agenda.