“Instead of correcting the tax and transfer problems that have contributed to the low rate of capital formation and growth, the natural tendency of the political process may be to emphasize policies that appear to have favourable short-term effects but that ignore the longer term consequences.” See Deutsche Bundesbank, The economic scene in Germany in spring 1999, Monthly Report, May 1999, p. 67.
BIS Review 115/1999  6  drew attention to this point again in a statement he made on the statutory pension system to the House of Representatives.17 In Germany, up to now households have been the most important provider of savings. Of course, the funds provided by them, were not sufficient to satisfy the enormous financing requirements of the German unification process.