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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.

310 (191-200)
April 17, 2015
Region:
Analyst:
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]
191
April 9, 2015
Region:
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]
192
March 30, 2015
Region:
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]
193
March 30, 2015
Region:
Since around 2009, the German healthcare system has been characterised by weak investment. One reason is that public subsidies for the sector have been reduced. This development harbours risks, for only a regular renewal of medical appliances and equipment is likely to ensure the high quality of treatment in Germany in the long term. By contrast, lower investments in the building stock would primarily mean a reduction in the current hospital overcapacities. [more]
194
March 20, 2015
Region:
In the EU there is ongoing debate about so-called "social benefit tourism". Not only supporters of populist parties, but also broader sections of the population say that the current rules on free movement and coordination of social security systems virtually invite people from southern, central and eastern Europe to migrate into the social security systems of more prosperous partner countries and thus overstrain these systems. Reforms should, at the very least, aim at making the current law less contestable and easier for national authorities to apply. Much argues in favour of taking a generally more restrictive approach. The closer coordination of the social security systems sought in various quarters is not suitable as a driver of European integration. [more]
195
March 9, 2015
Region:
While the German economy is generally getting a growth boost from the slump in oil prices, the oil-producing countries are seeing their economic prospects deteriorate. This could bring pressure to bear on German goods exports to these countries, which totalled no less than EUR 73 bn in 2014 (export share: 6.4%), and trigger a 10-15% nominal decrease in 2015. The sectors in Germany that have particularly benefited so far from the oil producers' "petrodollar recycling" include mechanical engineering and other transport equipment (mainly aircraft). In these cases, both the export ratios and the shares of the oil countries in total sector exports are above average. [more]
196
March 2, 2015
Region:
The Q4 GDP details corroborate that the German economy ended 2014 on a high note (+0.7% qoq vs +0.1% in Q3) as private consumption received a substantial stimulus from the drop of the oil prices. We increase our 2015 GDP forecast to 2.0% from 1.4% previously. This is especially due to the much larger carry-over effect courtesy of the marked Q4 GDP growth. In addition, we raise our Q1 GDP forecast to 0.5% qoq as the renewed oil price drop will boost consumption again. Sentiment also improved further in January/February with ifo expectations and the composite PMI pointing to 0.5% and 0.4% growth, respectively. [more]
197
February 20, 2015
Region:
The commercial and data protection foundations for debate about big data may well already be in place. But far removed from the debate about monetisation and data misuse there is another world in which data applications, regardless of their data volumes, can provide a valuable economic benefit to society. Our increasingly digital and data-driven economy enables us to more rapidly detect potential ways to boost efficiency and productivity and subject them to closer scrutiny. In this context, the desire for greater transparency, participation and collaboration provides an important motive for experimenting ultimately in fact with new forms of democratic processes. The initially exponential growth in the volume of data and its intelligent evaluation provide the fertile breeding ground needed for innovation and economic growth in the digital age. [more]
198
February 6, 2015
Region:
With the independence referendum in Scotland and unofficial polls in Catalonia and Veneto, separatist aspirations in Europe were recently given a boost. In regions seeking greater self-determination or even full secession, not only emotional and cultural aspects play a role but also concrete financial motives. Nearly all the regions seeking greater autonomy are among the wealthiest in their respective countries and far outstrip the national average in terms of per capita income. Moreover, some of them are substantial net contributors in regional redistribution systems. [more]
199
February 2, 2015
Region:
Late last year we raised our GDP forecast for Germany from 0.8% to 1.0% on account of the steep downside correction on expectations for oil prices. We now expect German GDP growth to hit 1.4% in 2015. Reasons: Growth slightly exceeded expectations in Q4 2014; the oil price forecast for 2015 has been lowered again; and the euro has fallen more sharply against the US dollar than anticipated. Given this good outlook for the economy Germany's public budgets are likely to show a slight surplus again in 2015. Moreover, the current account surplus is set to jump to 8% of GDP. This suggests there will be further calls for Germany to use its fiscal room for manoeuvre to pursue a public investment programme. Also, international criticism of German economic policy is likely to grow louder. Further topics in this issue: German industrial output forecast upped to 1.5%, 10 "golden" rules for ifo, PMI and Co., The view from Berlin. [more]
200
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