The success of Germany’s planned “energy transition” depends largely on how willing companies are to drive innovations in renewable energy forward. New regulations, government subsidies and rising fossil fuel prices are not the only decisive factors for this shift in energy usage. According to a recent study conducted by the Centre for European Economic Research (ZEW), Mannheim, and the Augsburg University of Applied Sciences, regional factors may also come into play, with German companies located near renewable energy plants and in regions with a high percentage of Green Party voters being more likely to invest in renewable energy.
On 6 December 2017, the European Commission presented its proposals on how to further integrate Europe's Economic and Monetary Union. The roadmap set out by the EU Commission includes, for instance, plans to introduce a European finance minister in 2019 as well as to transform the European Stability Mechanism (ESM) into a European Monetary Fund (EMF) with the aim of supporting Eurozone countries in the event of an economic or financial crisis. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW), offers his view on the matter.
According to official statistics, in 2016 around 330,000 households in Germany had their power cut off because of unpaid energy bills. In this respect, families with children are much more likely to be affected than other consumers. This also holds for recipients of basic unemployment benefits since they have an increased risk of falling behind with their payments. As a consequence, the probability of receiving disconnection notices and facing electricity cut-offs is higher for these households than for others. Individuals with a low level of education as well as single-person households have a small chance of averting impending power cut-offs. Furthermore, the probability of a disconnection is particularly high among households who are in debt.
The ZEW Indicator of Economic Sentiment for Germany in November 2017 has once again improved on the result from the previous month. The indicator currently stands at 18.7 points, which corresponds to an increase of 1.1 points compared with the October result. The indicator, however, still remains below the long-term average of 23.7 points. “The prospects for the German economy remain encouragingly positive. Overall high levels of growth across Europe in the third quarter are supporting further growth in Germany and boosting expectations for the coming six months. This favourable economic climate should be used to create a stronger and more robust basis for future growth,” comments ZEW President Professor Achim Wambach.
Southern European countries profit in a disproportionate way from the bond-buying programme of the European Central Bank (ECB), with the largest bias towards Spain and Italy. Within the framework of the Public Sector Purchase Programme (PSPP), national central banks and the ECB have purchased Spanish and Italian government bonds whose volume exceeds Spain’s and Italy’s share in gross domestic product (GPD) by around 43 billion euros and 51 billion euros, respectively. If the ECB continues its bond-buying programme in 2018, this would further extend the preferential treatment of euro countries with high debt levels. These are the findings of a current quantitative analysis by the Centre for European Economic Research (ZEW) in Mannheim.