FDP ministers want to spice up stocks in Germany

BERLIN / FRANKFURT FDP federal ministers Christian Lindner (finance) and Marco Buschmann (justice) want to make stakes in Germany more attractive with a broad package of measures. “We want to strengthen the culture of action in Germany,” Lindner said Wednesday in Berlin. “Securities are not for millionaires, securities are for millions.” For that to happen, however, the framework conditions would need to be improved. A higher allowance should be made for profits from the sale of shares and equity participation funds in private assets.

FDP ministers presented the key points of capital market modernization. However, they are not yet united under a federal government composed of the SPD, the Greens and the FDP. The target is implementation in the coming year, said Lindner.

In particular, Lindner and Buschmann plan that emerging companies (start-ups) should have easier access to capital. The tax framework for greater employee participation in their company’s success is to be improved. The employee equity allowance is to be increased from the current EUR 1,440 to EUR 5,000. The increase is also expected to increase the employee savings allowance for investing capital-generating benefits in the share in assets. Investments in stocks and assets should be more tax attractive, Buschmann said.

For example, compared to Anglo-Saxon countries, the people of Germany have relatively few shares. According to data from Deutsches Aktieninstitut, on average in 2021, almost 12.07 million people in Germany had stocks, equity funds or index funds (ETFs) in their portfolios. According to this, 17.1 percent of the population invested in the stock market, i.e. about one in six people aged 14 and over. In other industrialized countries, the share of shareholders is much higher in some cases, eg in the USA, the state promotes more retirement provision through the capital market.

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Lindner and Buschmann stressed that Germany faces the enormous task of shaping the digital transformation and the transition to a climate neutral economy. This can only succeed if, in addition to the extensive public funding provided by the state, sufficient private capital can be mobilized. For this, the capital market must be more efficient and the German financial center more attractive. “The capital market is the engine of change,” said Finance Minister Lindner.

In key points, it is also possible to issue shares as electronic securities. “In the future, we will also allow the digital age for action to dawn,” said Federal Justice Minister Buschmann.

The Institute welcomed the initiative. “We urgently need to make more capital available to our companies so that they can find solutions to challenges such as digitization and climate change,” said Christine Bortenlänger, head of the institute.

According to Deutsche Börse board member Thomas Book, the proposals provide a very good basis for exploiting the potential of the German capital market for future investments: “Now it is important to act quickly. As Deutsche Börse we are always ready to afford our contribution. “

Praise also came from the German Banking Association (BdB). “Germany is facing a decade of investment. To meet this challenge, we need private capital and a strong financial market, ”commented BdB CEO Christian Ossig. “In addition to the national framework, the European Union of Capital Markets is and will remain decisive for a competitive financial market. Germany must take the lead here.

Capital Markets Union is essentially about removing bureaucratic obstacles between countries in the European Union to give companies more opportunities to raise money. Consumers should also have more opportunities for cross-border investment. Loans and financing in Europe – unlike the US – are mainly provided by banks. The European Commission’s plans for a capital markets union have been under consideration since September 2015, but their implementation is weakening.

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