Talking point
China – the new financial player in Latin America
Chinese President Xi Jinping just finished a visit to Latin America, which included Brazil, Argentina, Venezuela and Cuba, at a time of rapidly increasing trade and investment ties between China and the region. China is the largest export market for Brazil, Chile and Uruguay, and the second largest for Peru, Venezuela and Cuba. The volume of bilateral trade rose over 20 times from USD 12 bn to USD 288 bn between 2000 and 2013. New Chinese investment in Latin America was around USD 9.2 bn in 2012. [more]
Germany
Temporary immigration boom: A wake-up call for politicians?
Germany has become the No. 1 destination country for migrants in Europe again and No. 2 in the whole OECD after the United States. The turnaround reflects the crisis in the EMU periphery as well as the (postponed) opening of the German labour market to citizens from the 10 Central and Eastern European countries that joined the EU in 2004 and 2007. The higher immigration should only temporarily obscure the negative effects from the introduction of a minimum wage and the retirement wave triggered by the "pension at 63" option. Given the economic recovery in the eurozone periphery the present migration surge is unlikely to last and ageing Germany’s demand for labour from outside the EU will increase. Therefore, Germany needs to shape up to encourage more pull-based immigration. This requires a skills-oriented migration policy as well as more flexibility in the labour market and at the company level. [more]
European integration
Small is beautiful? Capital market funding for sub-sovereign authorities on the rise
Sub-sovereign bonds are a segment that has attracted little attention to date. Bonds are the dominant form of funding for Germany's Länder, though, and they also play an important role for the regions in Spain. While the Länder benefit from Germany’s excellent sovereign rating, only those Spanish regions not forced to request financial assistance from the central government at the height of the debt crisis have recently been able to obtain financing via the capital market. In France the issuance by the municipalities is likely to increase due to the newly established Agence France Locale. A local authority finance agency is also in the process of being introduced in the United Kingdom. The importance of the sub-sovereign bond market crucially depends on country-specific institutional arrangements. [more]
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