ZEW Indicator of Economic Sentiment
ZEW Financial Market Survey | Business cycle research | Cyclical indicator | Business survey | Short-term forecast | Germany | Business Cycle | ZEW Indicator of Economic Sentiment
ZEW Indicator of Economic Sentiment for Germany, October 2017

The ZEW Indicator of Economic Sentiment for Germany continued to improve in October 2017, however, not as strongly as in the previous month. The indicator currently stands at 17.6 points, which corresponds to an increase of 0.6 points compared with the September result. The indicator, however, still remains below the long-term average of 23.8 points. "The improved outlook for the coming six months is not least the result of the surprisingly positive growth figures seen in the previous months. In August, figures for both production and incoming orders were significantly better than expected. The framework conditions for German exports, which have already seen a significant rise, are further improved by positive growth figures for Europe. The fact that the inflation rate is rising again, and expected to climb further, equally points towards a positive economic development in Germany, making a change in the ECB’s monetary policy more likely," comments ZEW President Professor Achim Wambach.

M&A Index
M&A activity | M&A | Takeover | Merger | ZEW-ZEPHYR M&A-Index | Mergers and Acquisitions | M&A report
The number of mergers and acquisitions involving German firms has dropped considerably since early 2017 according to the ZEW-ZEPHYR M&A Index.

After a strong start to the year 2017, the number of mergers and acquisitions (M&A) involving German firms has fallen. This trend is clearly discernible in the ZEW-ZEPHYR M&A Index, which reflects the number of M&A transactions conducted in Germany on a monthly basis. While back in January 2017, the index reached 145 points – its highest level since January 2009 – by July, it had fallen to 75 points. This seems to indicate that the continuing upward trend in mergers and acquisitions involving German firms has stalled. These are the findings of the latest M&A report carried out by the Centre for European Economic Research (ZEW), Mannheim, on the basis of the Zephyr database of Bureau van Dijk.

Comment
Competition authority | Airline | Competition | Merger control | Air Transport
The majority of insolvent airline Air Berlin will be taken over by Lufthansa.

Lufthansa has announced that it plans to take over the majority of the airline Air Berlin, which recently declared insolvency. Professor Achim Wambach, PhD, president of ZEW and chairman of the Monopolies Commission, offers his thoughts on the announcement.

China Economic Barometer
ZEW-PwC Indicator of Economic Sentiment China | China | Greater China | Short-term forecast | Managers | Business survey | Business cycle research

The EU and Germany are already profiting from the UK’s decision to leave the EU. According to the assessment of German CEOs working in China, Brexit is offering many European companies the opportunity to expand their trade with China. These are the findings of the ZEW-PwC China Economic Barometer, a survey carried out by the Centre for European Economic Research (ZEW), Mannheim, together with the accounting and consulting firm PricewaterhouseCoopers (PwC), for the fourth quarter of 2017.

Research
Income tax policy | Tax reform | Households | Political reform | Income tax | Tax relief
Planned reforms of income tax and the “solidarity surcharge” in Germany differ wildly depending on which political camp they come from.

Planned reforms of income tax and the “solidarity surcharge” in Germany differ wildly depending on which political camp they come from. By far the greatest variation is visible in the taxation of private households. Total tax relief based on the various parties’ tax plans could range from 1.5 billion to 34.6 billion euros, while the average disposable income of private households could rise from anywhere between 107 to 905 euros a year. In all of the suggested tax reform plans, the absolute tax reductions for households (in euros) for the most part increase with income. These are the principal findings of a joint study conducted by the Centre for European Economic Research (ZEW), Mannheim, and the IZA – Institute of Labor Economics, Bonn, on behalf of the German Federal Ministry for Economic Affairs and Energy.

Comment
Referendum | Spain | National liberation movement | Europe | Fiscal policy
Demonstrations in favour of independence from Spain have become a daily occurrence on the streets of the Catalan capital, Barcelona.

In the aftermath of the independence referendum in Catalonia, supporters and opponents of Catalan secession remain bitterly divided. The chaotic conflict surrounding the referendum represents a severe test to Spanish unity. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW) in Mannheim, offers his view on the referendum and its implications for a potential European fiscal union.

Research
Real estate | Real Estate Services | Residential real estate | Real property tax | Real estate market
Municipalities in Germany in which most residents live in rented accommodation often impose higher property taxes.

The local multipliers for the German property tax B, which is levied on residential real estate property by the municipalities, can vary greatly from region to region. Under otherwise comparable conditions, property in municipalities where most residents are home-owners is taxed at a lower rate than in municipalities where most residents live in rented accommodation. These are the findings of a joint study carried out by the Centre for European Economic Research (ZEW) in Mannheim and the University of St. Gallen.

Dates and News
Student competition | Start-Up | Innovation | ZEW | YES! - Young Economic Summit

Daniel Günther, Minister President of Schleswig-Holstein, announced the winners of the German economics competition YES! – Young Economic Summit 2017: The student team from BBS Wirtschaft 1 Ludwigshafen won the vote for the best solution and brought home the 2017 YES! Award.

Comment
European Union | Reform | Germany | France | European Integration | Eurozone

French President Emmanuel Macron has laid out his vision for reform of the European Union and the Eurozone. In his speech, he called for Europe to strengthen its efforts in the fields of defence policy, common border management and development aid. Furthermore, Macron emphasised the need to harmonise tax and social policies and to shift competencies to the EU in these fields. As expected, he proposed once again to introduce a common budget for the Eurozone and a European finance minister. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW) in Mannheim, comments on Macron's speech.

China Economic Panel
China | Cyclical indicator | Short-term forecast | Greater China | Business survey | China Economic Panel
In September, the CEP Indicator continued its rise and stands currently at 8.3 points.

According to the most recent survey for September (6–20 September 2017), the economic outlook for China has improved again, rising by 8.3 points. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, currently stands at 8.3 points (August 2017: 0.0 points), coming in once again slightly above the long-term average of 5.1 points.

Contact

PR Officer

Phone: +49 (0)621 1235-103

Fax: +49 (0)621 1235-255

felix.kretz@zew.de