Economics Roundtable

Over the past week, the German economy has shown first real signs of an economic slow-down. Data from the labour market has been much less upbeat than before. Yesterday, also manufacturing orders took a hit, pointing to a further growth moderation starting in the second quarter of 2008. The strong ...

Next Wednesday, May 7th, the European Commission will put forward a long-awaited report on the Eurozone. A few months ahead of the Euro's 10th anniversary, this report is unlikely to trigger a debate the EMU should go through, given recent developments, such as the increasingly observed cyclical divergence and prolonged ...

With the euro having jumped above the mark of 1.60 $ for the first time in history, recent macroeconomic data shows that the strong currency is taking its toll on the continental European economy. The advance manufacturing PMI for the euro-area for April published today fell by 1.2 points to ...

The French Finance Minister Christine Lagarde last week announced that Paris would use its Presidency of the European Council starting on July 1, 2008 to push for a common corporate tax base. Despite its looks, this is yet not another brand new initiative by Nicolas Sarkozy - in addition to ...

Reading today's newspapers, one could get the impression that the 1970s are back in Germany. "9 percent more for the public sector" writes FT Deutschland. Wolfgang Munchau and Susanne Mundschenk in their Eurointelligence news briefing sound similarly gloomy when they title "The second round effect arrived yesterday" and write ...

On Eurozone Watch, we have repeatedly written about possible consequences of divergence in EMU business cycles (and possibly connected debates on EMU exit of single countries) and that at some point this might turn up in higher spreads of government bonds. David Milleker, ...

A year ago we published our forecast on Eurozone Watch that after years of decline (see here), unit labour costs in Germany would start to be back on a rising trend after the wage bargaining round in 2007. This forecast has proofed to be almost dead on target. Our ...

In the economic policy debate, Germans tend to extrapolate their current situation indiscriminately into the future. When the economy hardly grew at all in 2002 and 2003, German economists and journalists were quick to estimate potential growth to be "below 1 percent". Now, with exports having grown strongly over a ...

Today, I received an e-mail as a reaction to an interview which I had given the left-leaning German daily "taz" last week (see here for the German text). In this interview, I had claimed that the recent actions by the US Fed to calm markets do not create inflationary ...

Last weeks' news about the Eurogroup meeting and the ECB Board meeting revealed a clear rift between the political leaderships in the eurozone and the European Central Bank. For the first time since the euro started its race for ever new historical heights, all Finance Ministers of the Eurozone agreed ...