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Unemployment benefit Q and the elusive quest for social justice

March 16, 2017
Region:
Time to enhance (social) justice is the election campaign slogan of the SPD and its leadership candidate, Martin Schulz. To bring this slogan to life the chancellor candidate and the Federal Minister for Labour, Andrea Nahles, recently presented plans for specific labour market policy measures. The duo is proposing that the existing unemployment benefit be extended to include an additional component and that the eligibility criteria be relaxed. The idea of the new benefit Q (for qualification) is to grant registered recipients the right to participate in qualification programmes. It could double the benefit period – for younger jobseekers from one to two years and for those aged 58 and above from two to four years. [more]

More documents about "Macroeconomics"

307 (85-96)
October 6, 2017
Region:
85
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:
86
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 14, 2017
Region:
87
Yields on German government debt securities have fallen rapidly in the aftermath of the global financial and economic crisis and provided a considerable relief to the public sector budget. At the moment, federal government securities have negative yields for maturities up to 6 years and the yield on 10 year German Bunds stands at just roughly 0.4%. [more]
August 8, 2017
Region:
88
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]
August 3, 2017
Region:
89
The benign economic and public environment allows to fundamentally address shortcomings of the E(M)U. The next German government’s term is faced with numerous challenges ranging from Brexit and its impact on the next EU Budget to migration and the upgrade of the euro area. A revitalised relation with France provides the opportunity for substantive steps to further stabilise the euro area albeit Germany and France need to find common ground on many issues and seek the support of EU partners. European politics is still less of a topic for the German electorate not least as mainstream parties are all various shades of pro-European. However, the next government’s party composition is likely to matter for both speed and scope of changes on European level. [more]
July 19, 2017
Region:
90
In an international comparison, Germany’s fiscal situation is very good – thanks to robust GDP growth and zero interest rates. In the short to medium term, dynamic revenue growth should help to ensure that Germany’s fiscal situation remains comfortable, even though expenses look set to rise strongly as well. Public finances are currently benefiting from buoyant growth, low interest rates and a “demographic respite”. Rising interest rates and the ageing society look set to put the public finances under considerable pressure from the middle of the coming decade. However, the long-term fiscal risks do not appear to play a major role in the current election campaign. [more]
July 17, 2017
Region:
91
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:
92
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]
July 3, 2017
Region:
93
The developed industrial countries have experienced a steady decline in trend growth since the mid-70s – and Germany is no exception. The robust cyclical upswing is veiling this creeping erosion of growth. The demographic developments will considerably weigh on trend growth in the medium and the longer term. They will dampen labour supply, capital formation and total factor productivity. By 2025, trend growth looks set to halve again, to only ¾%. The electoral programmes of the established parties incorporate different positions on this key issue, as is to be expected. [more]
May 24, 2017
Region:
Analyst:
94
The traditional German export sectors pay their employees above-average wages and salaries. The top right-hand quadrant of the chart shows those sectors that generated a foreign trade surplus in 2016 and also paid their employees gross wages and salaries above the average for the manufacturing sector as a whole. In the automotive industry alone, the foreign trade surplus in 2016 was EUR 122 billion (39% of the total surplus). Wages and salaries in this sector were 27% higher than the industry mean. Mechanical engineering took second place in terms of foreign trade surplus (2016: EUR 94 billion). [more]
May 5, 2017
95
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]
April 28, 2017
Region:
Analyst:
96
The diesel scandal and political uncertainty surrounding future regulation are the main reasons why the proportion of vehicle registrations accounted for by diesel cars has slumped recently in Germany and most other EU countries. If the automotive industry wants to continue to rely on diesel technology, it needs to regain credibility and get to grips with the issue of emissions – including in real-world driving conditions. If it doesn't manage to do this, lawmakers are likely to progressively tighten the regulatory framework for diesel cars. However, should the industry succeed in bringing to market clean diesel cars at affordable prices, these cars would remain the most economical option for a large proportion of motorists – at least until alternative drive technologies become competitive from the customer perspective. This would make current proclamations of the death of diesel somewhat premature. [more]
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