http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/RSS_EUMON_EN.caliasHere are the latest issues in our EU Monitor series.Thu, 11 Apr 2013 00:00:00 +0200ResearchCopyright 1996-2010, DB Research, Deutsche Bank AGmarketing.dbr@db.comhttp://www.dbresearch.com/dbr/images/rss/logo.gifhttp://www.dbresearch.comThe current crisis has demonstrated that the eurozone is still a very heterogeneous economic area. As the common monetary policy cannot stabilise a country which experiences an asymmetric shock, there is a growing debate about whether the architecture of the eurozone needs to be complemented by fiscal stabilisation instruments. While the synchronisation of business cycles and an effective absorption of regional shocks would be in the interest of all the euro countries, the main question is how this could be put into practice without creating undesirable incentives. After all, a deeper fiscal integration would hardly be manageable without redistribution components. http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000304104/Do+all+roads+lead+to+fiscal+union%3F+Options+for+deeper+fiscal+integration+in+the+eurozone.pdfThu, 11 Apr 2013 00:00:00 +0200Economic policy, EMU, European integration, European issues, European policy issues, Fiscal policy, Key issuesPROD0000000000304104High investor demand is fuelling corporate bond issuance in the EU. Deleveraging in some countries and the fact that some banks are paying roughly the same or even higher rates for their refinancing than their customers no doubt has pushed corporate debt markets. But the main driver for the high issuance volumes seems to be investors’ search for yield in a low interest rate environment. As sovereign bonds are offering historically low yields, corporate bonds have turned into a significant investment alternative in the present market conditions. However, in an era of Knightian uncertainty and high liquidity, strong growth in corporate bond market calls for attention to potential overheating.http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000300834/Corporate+bond+issuance+in+Europe%3A+Where+do+we+stand+and+where+are+we+heading%3F.pdfThu, 31 Jan 2013 00:00:00 +0100Banking, Financial market trends, Global financial markets, International financial markets, Key issues, Supervision and regulationPROD0000000000300834Since the financial crisis, the countries of Europe have been faced with the difficult challenge of consolidating their budgets while at the same time promoting economic growth. One approach is a growth-conducive tax system, which keeps distorting effects of taxation on the growth factors – labour, capital and technological progress – as small as possible. Tax reforms carried out in the EU to date are steps in the right direction. Increasing economic policy coordination in Europe offers the chance to implement further structural reforms.http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000295266/The+impact+of+tax+systems+on+economic+growth+in+Europe%3A+An+overview.pdfFri, 05 Oct 2012 00:00:00 +0200Economic growth, Economic policy, European integration, European issues, European policy issues, Fiscal policy, Key issues, Macroeconomics, Tax policyPROD0000000000295266Since 2006 the European Union has increasingly been looking to sign deep and comprehensive free trade agreements with emerging markets. In the meantime it has also been turning its attention to some industrialised nations. A trade agreement with South Korea has already come into effect. Although the EU is pinning great hopes on India and a number of ASEAN states, it is also keen to conclude similar agreements with Mercosur, Canada, Ukraine and virtually all of the Southern Mediterranean countries. It is even considering Japan and the United States as potential partners. If the European Union's bilateral free trade strategy were fully implemented by the end of this decade, it would give a moderate boost to trade, welfare, growth and employment in the EU and would often provide a much stronger stimulus in the partner countries concerned. This free trade strategy is also highly ambitious in terms of its diplomatic objectives because issues that have so far received insufficient attention – such as trade in services, technical trade barriers and foreign direct investment – are to be better regulated. Whether the EU – currently the world's largest trading bloc – is ultimately successful with this strategy will in many cases be decided by domestic politics in the partner countries. The fundamental question of whether a deep bilateral strategy should perhaps be complemented by a parallel multilateral approach as a matter of considerable urgency will be especially pertinent in transatlantic relations. However, there is also a risk of tensions within the international system.http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000291817/Looking+for+partners%3A+The+EU%E2%80%99s+free+trade+agreements+in+perspective.pdfFri, 27 Jul 2012 00:00:00 +0200Auto industry, Economic growth, Economic policy, European integration, Globalisation, Intern. economic system, Intern. relations, International financial system, Key issues, Macroeconomics, Sectors / commodities, Trade, WTOPROD0000000000291817Banking Union – comprising a single rule book, supra-national supervision, a pan-European resolution regime and fund, and more harmonised deposit guarantee schemes – would help to preserve the single market for financial services, which shows signs of fragmentation, and to provide greater stability to the European Monetary Union. This ambitious project, which is designed to create a stable, trust-inspiring framework for Europe’s financial markets, cannot – and should not – be rushed. It is more important to (finally) get it right than to deliver quick results. http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000291512/EU+Banking+Union%3A+Do+it+right%2C+not+hastily%21.pdfMon, 23 Jul 2012 00:00:00 +0200Banking, EMU, European integration, European issues, Key issues, Supervision and regulationPROD0000000000291512Many western industrial nations are faced with high and rapidly rising debt-to-GDP ratios. This makes it necessary to consolidate public finances even while economic growth is weak. Among economic theorists, however, there is a dispute about how different consolidation measures impact on growth. Keynesian theory predicts negative short-term growth effects, whereas the non-Keynesian view considers positive effects to be possible in the short term as well. It is against this background that we shall analyse the 'Emergency Budget' of the UK’s coalition government. http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000285327/The+English+Patient.pdfTue, 21 Feb 2012 00:00:00 +0100Capital markets, Economic growth, Economic policy, European integration, European issues, European policy issues, Fiscal policy, Key issues, Labour market, Macroeconomics, Tax policyPROD0000000000285327Greece, Ireland and Portugal require economic growth, increased productivity and more innovations. All three countries have pronounced weaknesses in business innovation activity. The conditions for corporate innovations could be improved via measures such as developing technology centres, ameliorating innovation funding and enhancing entrepreneurial expertise. The regional policy competence of administrative authorities also needs to be upgraded. While Ireland’s innovation system is already well developed, Portugal occupies a lower mid-table position in a European ranking of innovation systems. There is little potential in Greece to leverage the development of fast-growing industries with high productivity levels. Therefore, the upgrading of traditional industries and services is of major importance.http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000283994/Greece%2C+Ireland%2C+Portugal%3A+More+growth+via+innovation.pdfFri, 27 Jan 2012 00:00:00 +0100Economic growth, Economic structure, Education, EMU, European integration, European issues, European policy issues, Innovation, Key issues, Macroeconomics, Sectors / commodities, Technology and innovationPROD0000000000283994Privatisation can make a major contribution to the consolidation of public budgets required in much of the euro area. It is not only a matter of raising new revenues in the short term to tackle an increasing debt load. Rather, countries that are determined to bite the bullet inspire investor confidence, which should have a positive impact on sovereign funding costs. Moreover, this is a way for a government to bolster growth capacities and expand opportunities for private-sector companies. Even though the topic has been on the economic policy agenda for at least twenty years there is still considerable privatisation potential in a number of EU countries, and this is likely to be worth 3-6% of their GDP.http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000281545/Revenue%2C+competition%2C+growth%3A+Potential+for+privatisation+in+the+euro+area.pdfThu, 01 Dec 2011 00:00:00 +0100Capital markets, Economic growth, Economic policy, European integration, European issues, European policy issues, Fiscal policy, Key issues, Macroeconomics, Privatisation/liberalisationPROD0000000000281545Below the surface of the euro area’s public debt and banking crisis lies a balance-of-payments crisis caused by the misalignment of internal real exchange rates. The path of least resistance seems to be an appreciation in creditor countries through the inflation of goods, services and asset prices. But will the electorates in the creditor countries accept a policy of easy money and exchange rate depreciation or push an exit from EMU? The authorities in creditor countries could insure their population against inflation and a soft currency policy by offering them index-linked securities that would convert into a new currency should these governments eventually decide to abandon the euro. Alternatively, authorities could aim at generating a combination of intra-EMU transfers, deflation in the debtor countries and inflation in the creditor countries such that the economic pain felt in each country group is shared between them in a way that leaves it below the level triggering a break-up of EMU.http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000279906/Euroland%E2%80%99s+hidden+balance-of-payments+crisis.pdfWed, 26 Oct 2011 00:00:00 +0200Banking, Capital markets, Economic growth, Economic policy, EMU, European integration, European issues, European policy issues, Exchange rates, Globalisation, Intern. economic system, International financial markets, International financial system, Key issues, Macroeconomics, Prices, inflationPROD0000000000279906The economic and sovereign debt crisis has driven unemployment in the ‘GIPS’ countries to record levels, while Germany is sorely in need of skilled workers. Labour migration could help offset this imbalance. Net immigration has in fact collapsed in the euro periphery. However, since immigration surpluses remain – with the exception of Ireland –, labour mobility is relieving only part of the pressure on the jobs market on the periphery of the euro area. Whilst adjustments so far have taken place primarily through changes in the patterns of migration by non-EU nationals, now Europeans, and here in particular young, well-qualified people, are apparently becoming more willing to relocate. But Germany still needs to offer better conditions for the immigration of skilled labour.http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000278645/Labour+mobility+in+the+euro+area.pdfTue, 20 Sep 2011 00:00:00 +0200Economic growth, Economic policy, European integration, Key issues, Labour market, Labour market policy, MacroeconomicsPROD0000000000278645