Research
Agricultural subsidy | Common agricultural policy | EU agricultural market regulations
The Bertelsmann-ZEW study finds that the costs of agricultural subsidies from EU funds outweigh the potential benefits.

Subsidies for European farmers from EU resources should be reduced after 2020. A total of more than 400 billion euros – over one third of the EU budget – is allocated to the agricultural sector within the current Multiannual Financial Framework. This allocation of the budget is no longer adequate to meet current challenges. Instead, the EU should devote more resources to new policy areas which actually provide European added value, such as defence, migration and foreign policy. These are the results of a study carried out by the Centre for European Economic Research (ZEW), Mannheim, at the initiative and on behalf of the Bertelsmann Foundation.

China Economic Panel
China Economic Panel | Business survey | Greater China | Short-term forecast | Cyclical indicator | China
In June, the CEP Indicator has increased substantially and is now at 9.7 points.

According to the current survey for June (6–21 June 2017), the economic outlook for China has once again improved significantly, rising by 9.8 points compared to the previous month. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, is currently at 9.7 points (May 2017: minus 0.1 points), thus once again rising above the long-term average of 5.3 points.

Research
| ZEW Financial Market Survey | United States | Financial market experts
Instead of benefiting the US economy, Donald Trump’s presidency seems to have a positive impact on growth in the EU.

Instead of boosting economic growth in the US, Donald Trump’s presidency rather seems to be having a positive impact on growth in the European Union. This is the result of a special question in the ZEW Financial Market Survey, a survey conducted regularly by the Centre for European Economic Research (ZEW) in Mannheim. According to the results, 32 per cent of the respondents expect Trump’s presidency to have a positive impact on economic growth in the EU.

Comment
Parliament | France | Election | Elections
Victory for French President Emmanuel Macron: His party “La République En Marche!” won a strong majority in the parliamentary elections.

With his party “La République En Marche!”, French President Emmanuel Macron secured the parliament’s backing, emerging as a clear winner in the French parliamentary elections. Professor Achim Wambach, President of the Centre for European Economic Research (ZEW) in Mannheim, comments:

Comment
Interest Rate | United States | Interest rate policy | Federal Reserve Bank

The Federal Reserve has raised the Federal Funds Rate for the second time this year, increasing the interest rate level to a range between 1.0 and 1.25 per cent. The Fed is also planning to initiate a gradual reduction of its $4.5 trillion balance sheet before the end of the year. 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 Fed’s actions:

Events
Student competition | ZEW | Germany | Pupils | YES! - Young Economic Summit
YES! is a joint project of the German National Library of Economics (ZBW) – Leibniz Information Centre for Economics and the Joachim Herz Stiftung.

The qualification round for the Germany-wide high school competition Young Economic Summit (YES!) will be held on 23 June 2017 at the Centre for European Economic Research (ZEW) in Mannheim. A total of 100 high school students from Baden-Württemberg, Hesse, Rhineland-Palatinate and Saarland will take part in the event. They will present their solutions for global economic issues and discuss them with expert economists. The winning teams will go forward to the YES! final in Kiel on 28 and 29 September 2017. The winners will be decided by the participants themselves. The qualification round will be opened by ZEW President Professor Achim Wambach.

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

The ZEW Indicator of Economic Sentiment for Germany dropped by 2.0 points in June 2017 and now stands at 18.6 points. The indicator thus still remains below the long-term average of 23.9 points. By contrast, the assessment of the current economic situation in Germany improved once again in June. The indicator climbed by 4.1 points to 88.0 points. This is the highest level since July 2011. Despite a slight drop in expectations, the prospects for the economic growth in Germany in the coming six months remain rather positive. “The prospects for the German economy remain favourable. This is not least due to the positive GDP growth in the European Union in the first quarter of 2017. 70.8 per cent of the financial market experts expect the current situation to remain as favourable as it is at the moment, and 23.9 per cent even expect it to improve in the coming six months,” comments ZEW President Professor Achim Wambach.

Research
Digitisation | Customers | Economic sector | Value added | Enterprise
Digital connectedness with the agents at the end of the value chain – private clients and logistics – is far less common.

As part of digital transformation, firms are integrating their value chains using technology. However, only one third of firms in the German business economy are digitally connected with their private customers. It is far more common for firms to connect with their corporate clients and suppliers. These are the findings of the “Monitoring Report DIGITAL Economy 2017 – Compact”, compiled by the Mannheim-based Centre for European Economic Research (ZEW) in collaboration with Kantar TNS, on behalf of the Federal Ministry for Economic Affairs and Energy.

Comment
ECB | Monetary Policy | Interest rate policy | Interest Rate | Monetary policy decisions
The ECB has announced to make no changes to its key interest rates and bond-buying programme.

As expected, the European Central Bank (ECB) has announced to make no changes to its key interest rates and bond-buying programme. In its latest decision, the ECB has, however, taken into account the persistently high growth rates in the eurozone as well as the increased inflation rate. ECB President Mario Draghi expects the economic growth prospects in the eurozone to improve even further. Dr. Michael Schröder comments on the ECB’s decision:

Research
international comparison | Income distribution | Income and Wealth Distribution | Wealth distribution | Germany | Financial crisis
While the share of wealthy households in Germany is rather small, these households are comparatively wealthier than those in other countries.

Neither the financial crisis of 2008 nor the ensuing economic crisis have had a noticeable impact on the distribution of income and wealth in Germany. Though income inequality did dip slightly and the poverty risk rose over the course of the crisis, these were only minimal changes. The effects of the financial crisis on the distribution of wealth were also marginal, with wealth in Germany remaining overall relatively unevenly distributed. These are the results of a study carried out by the Mannheim Centre for European Economic Research (ZEW) together with the Institute for Applied Economic Research (IAW), Tübingen, and the University of Tübingen. The study was conducted as part of the report on the Analysis of the Distribution of Income and Wealth (AVEV) produced on behalf of the German Federal Ministry of Labour and Social Affairs.

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