Latest Press Releases

Shaping structural change poses a myriad of challenges for the industrial landscape and is the central topic at this year’s Day of German Industry (21 to 23 June 2021). ZEW President Professor Achim Wambach commented on this matter:

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Support is growing for the introduction of a global minimum tax on corporate profits. This was clearly demonstrated at the recent meeting of the G7 finance ministers. The Federation of German Industries (BDI) took this as an opportunity to organise a panel discussion on “Global Minimum Tax – Consequences for the German Economy” on 18 June 2021, including Christopher Ludwig, a member of the team of tax experts led by Professor Christoph Spengel at ZEW Mannheim and the University of Mannheim. In recent months, the tax experts have closely examined and evaluated the OECD’s reform proposals. Spengel, who worked on a BDI paper on this topic, comments on the global minimum tax:

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The digital transformation continues to be a much-discussed topic that occupies business, politics and society. But how well are the federal states managing to keep up with this rapid development? An evaluation of the digitalisation level in Baden-Württemberg shows that the state has made great progress since the adoption of its digitalisation strategy “digital@bw” in 2017. The COVID-19 pandemic has accelerated this transformation considerably, but at the same time it has also revealed existing shortcomings. This is the result of a meta-study conducted by ZEW Mannheim on behalf of the state of Baden-Württemberg.

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Against the background of rising inflation expectations and low interest rates, financial market experts have assessed the attractiveness of various asset classes for the next six months: While investments in stocks, commodities and real estate are currently considered attractive, the outlook for cryptocurrencies and conventional government bonds is clearly negative. Inflation-indexed bonds and green bonds are rated slightly positively by the financial analysts. This is the result of a question included in the ZEW Financial Market Survey, which was conducted among around 160 financial market experts in June 2021.

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Given a shortage of skilled labour, cities are increasingly vying for qualified workers. A higher quality of life is often said to give cities an advantage in this battle for talent. In fact, the amenities a city offers in terms of family friendliness, infrastructure, cultural offerings and regional economic dynamics play a major role in employees’ decision to move to a particular city. A study by ZEW Mannheim comes to the conclusion that high and low-skilled workers prefer very similar cities. The lower share of low-skilled workers in attractive urban areas thus mainly reflects the fact that low-wage earners are less able to afford to move to attractive cities due to the high cost of living.

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The ECB Governing Council has decided not to make any changes to its monetary policy yet. For the time being, bond purchases under the PEPP crisis programme will continue at their current level. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, explains:

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On 10 June, the German Bundestag will discuss an amendment to the Federal Climate Change Act. The amendment had become necessary after a ruling by the Federal Constitutional Court. Professor Sebastian Rausch, head of the Research Department “Environmental and Resource Economics, Environmental Management” at ZEW Mannheim, comments on this matter.

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The ZEW Indicator of Economic Sentiment for Germany decreased in the current June 2021 survey, falling 4.6 points to a new reading of 79.8 points. By contrast, the assessment of the economic situation in Germany improved very significantly, with the corresponding indicator currently standing at minus 9.1 points, 31.0 points higher than in the previous month. The assessment of the economic situation in Germany is now back to the pre-pandemic level of August 2019. Due to the very high economic expectations, the outlook is now much more positive than in summer 2019.

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At their meeting in London, the finance leaders from the Group of 7 countries agreed on backing the creation of a global minimum tax rate of at least 15 per cent for large companies. In addition, the agreement envisages forcing the largest and most profitable companies to pay taxes on part of their turnover to countries based on where they sell their services and goods. Until now, multinational companies have been able to shift profits and thus avoid taxation in countries with higher tax rates. Professor Christoph Spengel, tax expert at ZEW Mannheim and the University of Mannheim, comments on these plans:

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Exactly 70 years ago, the model of parity codetermination was introduced in Germany. On 7 June 1951, the Coal and Steel Codetermination Act came into force and ensured that female and male workers had a say in major company decisions on supervisory boards. For a long time, women were hardly represented on these boards. With the establishment of a fixed gender quota in 2015, their share in leadership positions in the companies covered by this law was increased to more than one third.

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