Comment
European Union | Reform actions | Europe | European policy | Reform | Eurozone | reform process

The next German government should not agree to any reform of the Eurozone that does not include the introduction of an insolvency system for Member States deep in government debt. To mark the founding conference of the „European Network for Economic and Fiscal Policy Research“ (EconPol Europe)), ZEW research department head Professor Friedrich Heinemann today in Brussels presented an outline of a potential Eurozone reform.

Comment
Tax revenue estimation | Germany | Tax Policy

The German Federal Ministry of Finance’s Working Party on Tax Revenue Estimates has for the second time this year made an upward adjustment of its forecasts for federal, state and municipal tax revenues in Germany up until the year 2021. According to their estimates, government tax revenue is set to rise from 734.2 billion euros in 2017 to 889.6 billion euros in 2022, a greater increase than that previously predicted by the Working Party in May 2017. ZEW research department head Professor Friedrich Heinemann offers his view on the subject.

Dates and News
Research data | Knowledge management | Information management | ZEW | Open Science
Open Access involves making research publications freely available online.

The Centre for European Economic Research (ZEW), Mannheim, has taken a clear stance for greater transparency and openness with its new Open Access strategy. Open Access involves making research publications freely available online. With its new strategy, ZEW joins the national and international efforts, specifically the Leibniz Association’s Open Access Guidelines, aimed at making scientific knowledge available to all without any technical, legal or financial barriers.

Comment
Public bond | ECB | Monetary Policy | Interest rate policy | Eurozone | Monetary policy decisions
The ECB has cut back its bond purchase programme, but has no plans to end the programme in 2018.

As expected, the European Central Bank (ECB) has announced its decision to continue its asset purchase programme beyond the end of the year. Until December of this year the ECB will purchase bonds totalling 60 billion euros each month, dropping down to 30 billion euros a month from January 2018 until at least September 2018. 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 subject.

Information Economy
Information Services | Germany | Sectoral business cycle | Sectoral development

Economic sentiment among companies in the German information economy sector has been largely positive in the third quarter of 2017, as suggested by the ZEW Sentiment Indicator for the Information Economy. The indicator takes into account the companies’ current business situation as well as their business expectations. In comparison to the previous quarter, the sentiment indicator has climbed 0.6 points to a current level of 68.3 points. This is the result of a survey conducted among firms in the German information economy by the Centre for European Economic Research (ZEW), Mannheim, in September 2017.

Research
Public bond | Eurozone | Budget deficit | Monetary Policy | Southern Europe | Europe | ECB
The ECB bond purchase programme benefits in particular Spain and Italy.

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.

China Economic Panel
China Economic Panel | Business survey | Greater China | Short-term forecast | Cyclical indicator | China
In October, the CEP Indicator climbs further and stands currently at 17.3 points.

In the most recent survey for October (29/09/2017–17/10/2017) expectations regarding the economic climate in China rose considerably, with the index climbing 9.0 points to a current level of 17.3 points (compared to 8.3 points in September). The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, has thus once again come in well above the long-term average of 5.3 points.

Research
M&A activity | Air Transport | Takeover | Merger | Airline | M&A | M&A report

After the slow but steady upward trend witnessed since the turn of the millennium, M&A activities in the airline industry are for the first time experiencing a downward trend again. Since the beginning of 2000, the number of M&As involving businesses in the airline industry has averaged 97 transactions per year, with global transactions between 2007 and 2015 even amounting to more than 100 per year. In 2016, however, this number went down to 86 transactions. These are the findings of studies carried out by the Centre for European Economic Research (ZEW), Mannheim, on the basis of the Zephyr database of Bureau van Dijk.

Dates and News
ZEW | ZEW Sponsors' Association for Science and Practice
ZEW Director Thomas Kohl with Dr. Alexander Selent, Claudia Diem, Dr. Ralph Rheinboldt, ZEW President Professor Achim Wambach and Dr. Georg Müller (from left to right)

At its most recent general assembly, the Sponsors’ Association for Science and Practice at the Centre for European Economic Research (ZEW) in Mannheim elected Dr. Georg Müller, chief executive at MVV Energie AG, as its new chair. Newly admitted to the association’s board were Dr. Ralph Rheinboldt, board member at Fuchs Petrolub SE, and Manfred Bauer, board member at MLP SE.

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

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