It was a piece of good news for Federal Finance Minister Christian Lindner (FDP) during these chaotic times for the traffic light coalition. The Kenfo state fund to ensure the eventual final storage of nuclear waste delivered a return for 2023 that far exceeded the income required to finance ongoing nuclear waste disposal in Germany. After a challenging year for stock markets in 2022, the fund has proven that it knows how to handle money soundly. Lindner posted on X that the critics had been proved wrong. There is no gambling, but instead the pleasing reality of an 11.1% return for 2023.

The Kenfo is also supposed to in future manage Generation Capital for the state. With credit-financed funds, the federal government wants to use the difference between its favourable debt interest rates and the return opportunities on the capital markets, to at least somewhat mitigate federal expenditure on the state pension in later years. Money is to be invested and multiplied for a decade. The management of the Kenfo is on the starting blocks. There is every indication that the concept will work. The funds for the pension can also be invested cost-effectively. The structure, management and monitoring of the Kenfo portfolio can be used synergistically for Generation Capital.

What is missing is the necessary legal basis. After the laborious agreement within the traffic light coalition government, the pension package II, including Generation Capital, was to be dealt with in the first reading in the Bundestag in June in order to finalise it before the end of the year. But even in this July session, the last before the summer break, the draft did not make it onto the agenda. Generation Capital has been caught up in the logjams within the Ampel coalition, as has the law for the new financial crime office to combat money laundering, or the financial market digitalisation law to implement the EU Mica and Dora directives. Everything is being postponed until the autumn – or indefinitely. The „traffic light“ parties are stopping the other coalition partners' plans in order to gain negotiating leverage.

Time is running out for Generation Capital. The equity pension was supposed to be passed into law last year. It is now uncertain whether it will be in place in 2024. And funds that are not invested today cannot yield a return tomorrow. One may doubt that Generation Capital will really ease the burden on future pension financing. But even if Germans were to realise that investing in the capital markets has nothing to do with gambling, this would go a long way towards a more relaxed relationship with the financial sector in Germany.