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<p>The following article shows that the objectives of the draft bill, which are being pursued with generation capital, namely the creation of foundation assets of 200 billion euros and annual distributions of 10 billion euros, are achieved without loan interest at a performance of 3.26%. If the foundation has to pay interest on the loan, the required performance increases, but the spread decreases steadily from the initial 3.26%. If the target distributions are to increase dynamically in the future, a performance of around 0.3 percentage points higher would be required as long as the federal government continues to grant loans. This performance appears to be realistically achievable in the long term. Nevertheless, its financial contribution is estimated to be low.</p>
</abstract>

The following article shows that the objectives of the draft bill, which are being pursued with generation capital, namely the creation of foundation assets of 200 billion euros and annual distributions of 10 billion euros, are achieved without loan interest at a performance of 3.26%. If the foundation has to pay interest on the loan, the required performance increases, but the spread decreases steadily from the initial 3.26%. If the target distributions are to increase dynamically in the future, a performance of around 0.3 percentage points higher would be required as long as the federal government continues to grant loans. This performance appears to be realistically achievable in the long term. Nevertheless, its financial contribution is estimated to be low.

Generational Capital = Gambler’s Capital? – The Implicit Target Performance of the Draft Bill

Wirtschaftsdienst

This work is licensed under the Creative Commons Attribution 4.0 International License.

Generationenkapital gleich Zockerkapital? – die implizite Ziel-Performance des Referentenentwurfs

The following article shows that the objectives of the draft bill, which are being pursued with generation capital, namely the creation of foundation assets of...

Generational Capital = Gambler’s Capital? – The Implicit Target Performance of the Draft Bill

Published Online: May 21, 2024

Page range: 343 - 349

DOI: https://doi.org/10.2478/wd-2024-0091

© 2024 Uwe Schätzlein, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.