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Dieter Braeuninger

Analyst
European Policy Research

Topics:
General economic policy,
provision for old age, demography, health policy

Address:
Mainzer Landstraße 11-17
60329 Frankfurt
Germany

E-Mail:
dieter.braeuninger@db.com

Phone:
+49-69-910-31708

More documents written by Dieter Braeuninger

34 Documents
November 13, 2017
Region:
1
Employment in Germany has been rising for years now. However, cyclical tailwinds increasingly hide structural problems, such as tighter regulation and demographic developments. If the labour market is not to become a major obstacle to German growth, the future government will need to take quick and decisive action to counteract existing and imminent imbalances on this key market. Reducing long-term unemployment will require a mix of policy measures. The total number of jobs would probably be significantly lower, if there was no low-wage sector. Integrating refugees and the “mismatch” between the qualifications desired by employers and the qualifications which unemployed people actually possess are major challenges. Which direction is the new German government going to take in labour market policy? [more]
November 3, 2017
Region:
2
Envisaged Jamaica coalition: After the exploratory talks is before the negotiations. It would not come as a surprise, if the coalition formation were to take longer than ever before in the Federal Republic and if the chancellor were not until January. Given that in many areas critical details remained unresolved in the first round of the exploratory talks, further challenging rounds will follow in the next few weeks. Only after that will the official coalition talks begin - provided the Greens sound the all-clear at their party convention. The search for compromises is aggravated, as many of the partners’ requests have to remain unfulfilled despite buoyant tax revenues. Initially, i.e. in 2018, the economic impulse of a "black-yellow-green" fiscal policy is likely to be very limited. But steps in the right direction of strengthening Germany are on the horizon. Another positive is the clear commitment to a united and strong Europe. (Also included in this issue: November tax estimate, German current account surplus, trends in the EU industry) [more]
October 6, 2017
Region:
3
The view from Berlin: Jamaica unlikely to trigger fundamental policy changes. The total additional fiscal impulse provided by a Jamaica coalition could in our view amount to between EUR 15 bn and EUR 20 bn in 2018. This would be only marginally more than the EUR 15 bn tax cuts "promised" by the outgoing Minister of Finance, which we had already taken into account in our 1.8% GDP forecast for 2018. Proposals in the FDP's election platform to scale back the ESM and to install an orderly EMU exit procedure have raised concerns among some EU politicians. We doubt that these two proposals will make it into the coalition treaty. Despite the FDP's insistence on more market- and rule-based procedure within EMU, it is very unlikely that Germany would not provide the necessary support if another EMU country slipped into acute crisis. (Also included in this issue: Public finances after the election, World trade) [more]
September 6, 2017
Region:
4
As the highlight of a so far uninspiring election campaign, Chancellor Merkel and her SPD contester Martin Schulz exchanged arguments in yesterday’s TV debate. Given the huge audience of 16.2 m, i.e. 26% of the electorate, Schulz understood the debate as an opportunity to challenge the Chancellor and to reverse the SPD’s downward trend in the polls. While the chancellor remained in her cautious rhetoric Martin Schulz tried to seize his chances by attacking Merkel’s policy course above all on migration and foreign policy as well as equality – issues voters consider most important in surveys. [more]
September 6, 2017
Region:
5
Germany booming but wage-inflation still missing. We have lifted our 2017 GDP forecast from 1.6% to 1.9%. 2018 we revised only marginally up (from 1.7% to 1.8%) as we expect euro-induced export headwinds to counteract domestic strength. In H1 the economy expanded with an annualized rate of 2.6%. With EUR appreciation feeding through only gradually and capex picking up, GDP growth should slow only marginally in H2. 2018 kicks off with wage negotiation in key sectors. The strong labour market suggests wage settlements north of 3%, but the (classic) Phillips curve nexus is only weak and other factors could weigh. (Also included in this issue: German wage round in 2018, industry output forecast, The view from Berlin) [more]
August 28, 2017
Region:
6
Since 2010, the German government’s tax revenues have gone up by one third to EUR 706 bn. On the face of it, Germany is a low-tax country, with a tax-to-GDP rate of 22.9%. The picture is misleading, however, because the German welfare state is largely funded by additional taxes, i.e. social security contributions. The overall tax burden on German citizens is higher than the OECD average and the tax structure in Germany is unfavourable. It would appear to make sense to flatten out the steep trajectory of rising marginal income tax rates for people in the lower and mid-range earnings brackets. Germany’s political parties are pledging to reform income tax in order to appeal to median voters and their core support. Overall, the amount by which the burden on taxpayers would be eased varies substantially across the parties. [more]
August 8, 2017
Region:
7
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]
July 17, 2017
Region:
8
The debate over welfare policy in Germany appears to be paradoxical. Albeit steadily rising social spending, some critics believe that there is a social imbalance. But social security continues to have a positive impact while the welfare system is benefiting from the positive economic development. A further expansion of the welfare state is in the cards given not only the demographic trend but also the parties’ proposals in the current election campaigns. Sustainability of the welfare system is playing second fiddle only despite the fact that already taxpayers are burdened with avoidable costs. [more]
July 7, 2017
Region:
9
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]
June 6, 2017
Region:
10
After Q1’s sturdy 0.6% qoq GDP growth, soft indicators do not signal any moderation of the growth momentum. Employment in 2017 so far, has been expanding at similar clip as in 2016, making our 1% consumption forecast for 2017 quite conservative. Exports have rebounded in the winter half – in line with global trade. The growth momentum of global trade seems to have peaked; therefore, we remain cautious, predicting 3.6% German export growth in 2017 after 2.7% last year. In combination with lingering geo-political uncertainty this will weigh on investment spending, where a utilization rate of 2pp above its long-term average suggests a still limited necessity to invest. Following Q1 GDP growth of 0.6% we have revised our 2017 GDP forecast to 1.3% (1.1%). Latest confidence surveys, however, hint at further upside potential and increasing risks of over-heating for 2018. Political observers in Germany have recently been focusing on the SPD’s ups and downs in the polls and the CDU’s reverse showing while smaller parties are fighting for public attention. From the present point of view (polls) a Jamaica coalition is the sole arithmetically feasible alternative to a renewed grand coalition after the September election. (Further topics: German industrial output – forecast for 2017; Corporate funding in Q1 – lending) [more]
May 5, 2017
12
Growth in global trade almost stagnated at just 1.3% in 2016, and in some months was even negative. During winter, global trade picked up again, rising by around 3% compared to the same period a year earlier. Given the positive sentiment prevailing across the globe, this rebound could well continue. However, this trend is not yet being fully reflected in other hard economic indicators, usually highly correlated with global trade, and sentiment may therefore overstate the actual trend a little. Still, our simple model of world trade, which suggests moderate growth of just over 2% in 2017 and around 3% in 2018 might represent the lower limit of the forecast range. However, compared to previous cycles the upturn could remain weak, not least because of the global trade restrictions that have been progressively ratcheted up since 2008. [more]