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Economic and european policy

In this section you find analyses and commentaries on European (and especially German) economic and fiscal policy. Particular attention is devoted to the institutional development of the EU, above all monetary union, and its individual policy areas.

278 (71-80)
August 8, 2017
Region:
Defence policy and defence expenditures have moved into the light of public attention ahead of September parliamentary elections, fuelled by US criticism of Europe’s NATO spending, the experience of the refugee crisis but also regained momentum for European integration. While NATO membership and EU defence integration is supported by the German public, a majority rejects an increase in the military budget. To reach NATO’s 2% of GDP target by 2024, defence expenditures would have to more than double within seven years. Mainstream parties agree that a more holistic security framework is required but they are divided on the details, in particular when it comes to the question on how much to spend for it. [more]
71
August 8, 2017
Region:
Forecast for German Q2 GDP lifted to 0.8%. Strong private consumption boosts retail sales. Germany’s fiscal outlook: Goldilocks will not last forever. The view from Berlin: Asylum policy & refugee issues back on stage. [more]
72
August 3, 2017
Region:
The benign economic and public environment allows to fundamentally address shortcomings of the E(M)U. The next German government’s term is faced with numerous challenges ranging from Brexit and its impact on the next EU Budget to migration and the upgrade of the euro area. A revitalised relation with France provides the opportunity for substantive steps to further stabilise the euro area albeit Germany and France need to find common ground on many issues and seek the support of EU partners. European politics is still less of a topic for the German electorate not least as mainstream parties are all various shades of pro-European. However, the next government’s party composition is likely to matter for both speed and scope of changes on European level. [more]
73
July 19, 2017
Region:
In an international comparison, Germany’s fiscal situation is very good – thanks to robust GDP growth and zero interest rates. In the short to medium term, dynamic revenue growth should help to ensure that Germany’s fiscal situation remains comfortable, even though expenses look set to rise strongly as well. Public finances are currently benefiting from buoyant growth, low interest rates and a “demographic respite”. Rising interest rates and the ageing society look set to put the public finances under considerable pressure from the middle of the coming decade. However, the long-term fiscal risks do not appear to play a major role in the current election campaign. [more]
75
July 7, 2017
Region:
The German economy is likely to have maintained its rapid growth rate in the second quarter. Consumer spending, in particular, has been stronger than expected thanks to the recent fall in oil prices and the continuing significant rise in employment levels. We have revised our GDP forecast for the whole year upwards to 1.6% (1.3%) which is equivalent to a calendar-adjusted rate of 2%. Considerable house price increases in 2017 and 2018 – and more significant wealth effects? The view from Berlin. Summertime and election campaigns. [more]
76
June 9, 2017
Region:
The reflection paper contains two stages for the evolution of EMU. The first stage is about completing processes that remain open, for example, the Banking Union (BU) and the Capital Markets Union (CMU). Even here the decisions are not without political controversy, such as deposit
insurance and a fiscal back stop for the Single Resolution Fund. [more]
78
May 24, 2017
Region:
Analyst:
The traditional German export sectors pay their employees above-average wages and salaries. The top right-hand quadrant of the chart shows those sectors that generated a foreign trade surplus in 2016 and also paid their employees gross wages and salaries above the average for the manufacturing sector as a whole. In the automotive industry alone, the foreign trade surplus in 2016 was EUR 122 billion (39% of the total surplus). Wages and salaries in this sector were 27% higher than the industry mean. Mechanical engineering took second place in terms of foreign trade surplus (2016: EUR 94 billion). [more]
79
April 28, 2017
Region:
Analyst:
The diesel scandal and political uncertainty surrounding future regulation are the main reasons why the proportion of vehicle registrations accounted for by diesel cars has slumped recently in Germany and most other EU countries. If the automotive industry wants to continue to rely on diesel technology, it needs to regain credibility and get to grips with the issue of emissions – including in real-world driving conditions. If it doesn't manage to do this, lawmakers are likely to progressively tighten the regulatory framework for diesel cars. However, should the industry succeed in bringing to market clean diesel cars at affordable prices, these cars would remain the most economical option for a large proportion of motorists – at least until alternative drive technologies become competitive from the customer perspective. This would make current proclamations of the death of diesel somewhat premature. [more]
80
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