Spotlight on Germany
With the sovereign debt crisis enveloping some parts of the euro area the financial markets have intensified their focus on Germany. Political decisions and trends in Europe's largest economy have a major impact on the progress of European integration. Much will also depend on how well Germany can maintain its economic strength. Thus, not only ground-breaking decisions for the euro and the European Union but also resolute reforms for sustainable growth are needed. Correspondingly, we cover a broad spectrum of issues: Deutsche Bank Research offers near-term analyses and comments on Germany's economic, fiscal and European policies, political trends, and the cyclical and sectoral outlook for German business.
Standpunkt Deutschland
The ECB must change course
Over the past century central banks have become the guardians of our economic and financial security. The Bundesbank and Federal Reserve are respected for achieving monetary stability, often in the face of political opposition. But central bankers can also lose the plot, usually by following the economic dogma of the day. When they do, their mistakes can be catastrophic.Today the behaviour of the European Central Bank suggests that it too has gone awry. After seven years of ever-looser monetary policy there is increasing evidence that following the current dogma, broad-based quantitative easing and negative interest rates, risks the long-term stability of the eurozone. [more]
Chart in focus
Focus Germany
Focus Germany: ECB helps industry and boosts property prices
There is a high level of excess demand in the housing market and it has grown in recent years. Demand for credit is also growing at a correspondingly rapid pace. The supply of credit could be boosted by further monetary stimulus. In the medium term, more buoyant lending is likely to increase interest rate risk. However, if lending growth remains low, there will be increased risk of overvaluations and a house price bubble. This is particularly true when little new housing is financed and lending is largely for existing property. Given the high level of excess demand in the housing market and the fact that office buildings are being converted to residential buildings, office space is also likely to be in short supply in the coming years. As a result, rents in the office market can be expected to rise more strongly, and could – for a time – outstrip the rise in rents in the housing market. Since Chancellor Merkel assumed office in 2005 her term has been dominated by crisis management, which often required leadership and moderation of differing interests in Europe. Managing the UK’s departure from the EU will have top priority for the time being. Nonetheless, Merkel is likely to focus her attention on domestic topics as much as on European ones in the upcoming months given the looming federal elections in autumn 2017. Also in this issue: Fewer insolvencies in German industry. [more]
Latest articles on Germany
27.07.2016
German industry, mortgage lending, German housing and office market, view from Berlin
04.07.2016
GDP growth, ECB, German consumers, labour market, view from Berlin
03.06.2016
GDP growth, fiscal outlook, View from Berlin
 
Germany
27.07.2016
German industry, mortgage lending, German housing and office market, view from Berlin
04.07.2016
GDP growth, ECB, German consumers, labour market, view from Berlin
03.06.2016
GDP growth, fiscal outlook, View from Berlin
 
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