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Brexit and the EU investment plan: Where do we go from here?

August 2, 2016
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Is Brexit going to impact on the EU investment plan? The short answer is „yes“. But the more interesting question is how it is going to play out both on the day-to-day operations, progress with the plan and the future of the European Fund for Strategic Investments (EFSI) in particular. [more]

More documents about "Economic and european policy"

308 (131-142)
September 27, 2016
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Analyst:
131
The Climate Action Plan 2050 is intended to show how Germany can meet its climate change targets; it is currently out for consultation with Federal German government departments. There was intense public criticism when individual passages of an earlier draft of the plan were diluted at the instigation of the German Chancellery. In this political discussion, long-term political ideals are confronted by cautious (more realistic?) recent assessments of technological progress, the economies of scale achievable by climate-friendly technologies, and adoption by consumers. The Climate Action Plan remains vague in many important aspects, such as the technologies to be used to meet climate change targets, the approximate absolute costs that can be expected, the restrictions on consumer sovereignty and commercial freedom of choice that politicians are considering and the future infringement of ownership rights and vested interests. [more]
September 2, 2016
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132
Against the backdrop of strong Q2 growth and the revision of historic data, we increase our GDP forecast for 2016 to 1.9% (from 1.7%). For 2017 we lower our growth forecast to 1.0% (from 1.3%). Muted wage growth will likely weigh on consumption growth and subdued exports as well as high global uncertainty might negatively impact equipment investments. Further topics in this issue: Fiscal balance, Current account surplus, Retail investors, German industry and View from Berlin. [more]
August 29, 2016
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Analyst:
133
Nearly four years ago, the European Commission set its sights on increasing the share of manufacturing in total gross value added from 15.5% at that time to 20% by 2020. This target will probably not be met. After all, in 2015 the share of manufacturing was only around 15.6% and thus scarcely higher than in 2012. However, industry's contribution to EU output has at least stopped decreasing since 2012. Furthermore, industrial gross value added has picked up (slightly) in the EU in recent years in both nominal and real terms. In a few member states, there have been highly contrasting developments in the significance of manufacturing in the economy. It is striking that the industry share in the three large Eastern Europe member states has increased sharply since 2012. Spain and Italy have reported modest gains. Germany has seen its industry share decline slightly in 2015; however, at 22.8% it still far outstrips the EU average. [more]
August 24, 2016
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Analyst:
135
The manufacturing sector is one of Germany's biggest employers. On average, more than 5.2 million people were working in manufacturing in the first half of 2016. This represents an increase of 6.3% compared with the beginning of 2005 – and comes in spite of the deep recession of 2008/2009. In the period under review, job growth was particularly strong in mechanical engineering, the food industry, the rubber and plastics industry, and the metals industry. Expansion of employment in German industry has slowed recently, however. Because of the low rate of global growth and muted investment activity, employment in the industrial sector is likely to stagnate up to 2017 – albeit at a high level. [more]
August 5, 2016
Region:
136
The mid-term review of the EU’s multiannual financial framework 2014-2020 is scheduled for the end of 2016. The scenario of a Brexit taking effect in the upcoming years and the potential impact thereof might well be discussed as part of the review. However, given current uncertainties about timing and circumstances of the UK leaving the European Union, it is still too early to fully adapt accounts. Yet, two things seem certain for the time being: First, a Brexit taking effect during the second half of the budgetary planning period would certainly prompt the need for further adjustments. Second, it would also affect funding for regional and cohesion policy as one of the largest EU budgetary items. [more]
July 28, 2016
Region:
137
The issue of future EU-UK relations has many facets. Among those widely overlooked so far are the consequences for the coordination of social security systems. Will the EU’s social and labour law-related standards still apply in the UK after Brexit? Will British pensioners living in France or Spain still be allowed to reside there and to receive a full pension? What about EU citizens’ access to services from Britain’s National Health Service (NHS)? Will bankers who have migrated from London to Frankfurt still be eligible to receive the German child benefit for their children who stayed behind? [more]
July 27, 2016
Region:
138
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]
July 4, 2016
Region:
140
The political and economic implications as well as the order of events of the Brexit are currently very hard to predict. We assume that Europe – as usual in recent years – will “muddle-through”. The ECB will not panic, but wait to assess the consequences of the UK’s choice to exit the EU. Due to Brexit we lower our 2017 German GDP forecast to 1.3% from 1.6%. About half of that is due to lower export growth. The other half of the revision results from lower investment in machinery & equipment by German corporates. All told, domestic demand should only feel a marginal impact given that the fundamental drivers – healthy labour market and construction sector – remain intact. Further topics in this issue: German consumers, labour market and Germany in the aftermath of the EU referendum in the UK. [more]
July 1, 2016
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Analyst:
141
Following the UK referendum, Brexit will also leave traces on German industry. After all, 7.5% of all German exports went to the UK in 2015, making it Germany’s third most important export market after the United States and France. The automotive and pharmaceutical industries are likely to be hit the hardest by Brexit. This is because the UK accounts for 12.8% and 10.5%, respectively, of these two industries’ total exports. In addition, they both generally have an above-average export ratio. The UK referendum is likely to have an impact on individual companies’ investment decisions and German companies’ UK pricing structures in the short term. [more]
June 23, 2016
Region:
142
What this victory for the Leave campaign ends up meaning for the future of Britain is debatable. What is not in doubt is that Europe without its brightest star will be a darker place. Adding to the gloom is the fact this was avoidable. Britain voting to go it alone mirrors a wider distrust in the European project – a manifestation of its weak economic situation. [more]
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