Talking point
Minimum wage: First negative effects become visible
Roughly 100 days have passed since the introduction of the minimum wage, and the Minister of Labour Andrea Nahles is already calling it a success story. However, we would urge caution given the considerable time lags with the effects of the minimum wage of EUR 8.50 per hour. In the medium term, we continue to expect clearly negative effects on employment and a missing of the targets of a more just income distribution and fiscal relief. In the medium term, we still expect a negative employment effect of 800,000 persons in line with our ex-ante study "Minimum wage of EUR 8.50 per hour: Grand Coalition on the wrong track". [more]
Hot off the press
Biotechnology: Funding gap jeopardising competitiveness
Biotechnology is one of the key technologies for securing Germany's position as a manufacturing location. While biotechnology research in Germany is being conducted at the leading edge and grants make it easier to set up a biotech firm, young companies often encounter funding bottlenecks when the start-up financing phase comes to an end. One indicator of how grave the funding situation is in Germany is that the average amount of venture capital available to a company is around four times as high in the US as it is in Germany. This funding gap could jeopardise Germany's high-tech strategy objective of beefing up key technologies in the domestic market. [more]
Germany
Focus Germany: German exporters facing strong headwind despite softer euro
The combination of the structural global trade slowdown, increased localization of production, demographic changes in Germany, the impact of recent economic policy decisions and further toughening of international competition are likely to be a considerable challenge for German exporters over the medium term. Thus, the domestic economy will play a bigger role again. Government policies can help ease the transition. German exporters could become even more globally active firms over the medium term. The specific reactions will vary by sector, though. The earnings generated by these firms around the globe are likely to be a blessing for an aging and more domestically driven economy in the decades ahead. [more]
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