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“The economic situation in Germany is better than in the public perception,” said Bundesbank First Deputy Governor Sabine Mauderer at the Bundesbank’s 4th Financial Centre Conference, speaking in front of around 400 guests. There were, she noted, new, positive dynamics in both the private and public sectors. Nevertheless, she warned that Germany and Europe need to keep an eye on existing challenges. Bundesbank President Joachim Nagel called for Europe to become more resilient in the face of geopolitical changes and for more progress in financial integration. 

At the conference, decision-makers from the world of politics, business and finance discussed how Germany and Europe can remain competitive in the face of geopolitical changes, digitalisation and demographic change, with a focus on the topics of innovation, energy and retirement provision.

Mauderer: Pension reform has potential to become a “gamechanger”

According to Mauderer, the pension reform currently under discussion could contribute to a culture shift, in which a very large number of families would start talking about shares and stock exchanges, either amongst themselves or with friends and colleagues. Among other things, the reform includes an early start pension and private pension funds, which will be specially promoted. 

If the desired “Swedish” pension were to be implemented together with the other pension provision elements, it would, in her view, significantly increase the pension level in the medium to long term. In the Swedish model, some of the contributions to the statutory pension are invested in the capital market. According to the First Deputy Governor, this has had a positive side effect: Sweden, which has around ten million inhabitants, recorded around 500 stock market listings between 2014 and 2024. Germany had only 90 IPOs during this period.

Mauderer: A watchful eye on the race for capital

Mauderer stressed that, as a central bank, the Bundesbank needs to keep an eye on the new competition for capital. It means that, alongside enterprises, governments also have a great need for investment, for example in the areas of digitalisation and security. At the same time, the government debt ratio in many countries is already enormously high. According to Mauderer, financing is expected to become more expensive and the non-bank financial sector, which also includes hedge funds, will play a significant role.

Nagel for progress in integration

In a fireside chat with Greek Economic and Finance Minister Kyriakos Pierrakakis, Bundesbank President Nagel said that Europe needs to focus on itself. Europe should not, he said, only look at what is happening in other economic areas. It needs to grapple with its own tasks and, for example, make faster progress in integrating capital and energy markets. Reducing bureaucracy is also important, according to Nagel. He stressed that Europe is the most important market for Europe. 

Nagel: Strengthening strategic autonomy through the digital euro

According to the Bundesbank President, the digital euro will help strengthen the European payment landscape’s resilience and sovereignty. European payment systems currently depend heavily on non-European providers. The digital euro would offer a European alternative. In doing so, it would complement, not replace, private payment solutions.

Exchange on innovation, energy and retirement provision

The topics of innovation, energy and retirement provision were also discussed in panels during the event. The speakers discussed, for example, how Germany and Europe could become more resilient in the areas of energy and technology. 

The panels on retirement provision focused on the question of how the old-age pension scheme could be rethought and what opportunities a funded pension scheme could offer Germany. 

Using the example of the health and automotive sectors, the speakers discussed Germany’s potential for innovation in a fireside chat on the topic. 

Melinda Crane acted as moderator for the meeting.