The German government said it would secure pensions to ease the long-term burden on the federal budget by investing in the capital markets.

This is an idea that was controversial inside and outside the government.

A capital stock of at least €200 billion ($217 billion) is to be created by the mid-2030s, dpa learnt from government circles on Monday.

An average of €10 billion is then to be paid out of the income each year as a subsidy to the statutory pension insurance scheme.

The plan is a central element of a pension package announced several months ago, which Finance Minister Christian Lindner and Labour Minister Hubertus Heil want to present to the public on Tuesday.

The scheme has proved controversial within the coalition government and among social organisations.

Last summer, the Greens’ pension expert Markus Kurth referred to the volatility of the financial markets, which could lead to high losses in the short term.

The Finance Ministry favours the steady return potential of the international capital markets.

The money should be invested long-term, broadly diversified and globally.

“Historical observations and studies show that such an investment strategy has reliably generated positive returns in the past,’’ the ministry said.

(dpa/NAN)