Latest Press Releases

The ZEW Indicator of Economic Sentiment for Germany increased significantly in the current January 2022 survey, climbing 21.8 points to a new reading of 51.7 points. However, the assessment of the economic situation in Germany has worsened again in the current survey. The corresponding indicator dropped 2.8 points to a level of minus 10.2 points.

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The Federal Statistical Office today published the first calculations on gross domestic product (GDP) and general government net lending/borrowing for 2021. According to the results, GDP increased by 2.7 per cent and the general government deficit amounted to 4.3 per cent of GDP in the second year of the pandemic. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, has commented on this matter:

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Hateful content is widespread on social media. Almost without restraint, users disregard rules and criminal laws on the internet and insult, defame or threaten other people. To counteract this, the Network Enforcement Act (NetzDG) was enacted in Germany in 2017. The regulation is effective in curbing harmful content on the internet, as a recent study by ZEW Mannheim shows.

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In a globalised and digitalised economy, the mobility of capital and labour is increasing. This promotes global tax competition: in the case of corporate income taxation, a race to the bottom can still be observed today. Contrary to this trend, the effective average tax burden of a highly qualified employee (net income 100,000 euros) is noticeably stagnating, while top statutory tax rates for high-income earners are rising. In the future, however, the taxation of highly qualified, mobile workers could become more important due to the massive digitalisation boost caused by the coronavirus pandemic. These are key findings of a study conducted by ZEW Mannheim together with the University of Mannheim and the University of Kiel.

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On 1 January 2022, France will take over the rotating presidency of the Council for six months under the motto “Recovery, strength, and a sense of belonging”. During this period, the French presidential and legislative elections will take place. This coincidence could create some tension. The president of ZEW Mannheim, Professor Achim Wambach, has commented on this matter:

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The Volksbank Weinheim Stiftung and ZEW Mannheim have given the “Future of the Working World” research award 2021 to Dr. Jan Kinne. In his work, Kinne demonstrates that with the help of artificial intelligence (AI), company website contents can be evaluated online with high-frequency and in a fully automated manner. Currently, such searches are mainly done manually by specialised companies, i.e. by humans. He applies this method to analyse, for example, the innovation activity of companies and the impact of the COVID-19 pandemic on businesses.

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1 January 2022 will be the twentieth anniversary of the introduction of euro banknotes and coins. The changeover to the euro, which had already taken place three years earlier, was thus fully completed. Professor Friedrich Heinemann, ZEW research department head, has scientifically accompanied the introduction of the euro. He assesses the success of the euro as follows:

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German Chancellor Olaf Scholz picked economist Joachim Nagel as the new president of the Bundesbank. This is reported by Handelsblatt and Der Spiegel, both citing government circles. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, has commented on that matter:

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The ECB Governing Council has decided to end net bond purchases under the PEPP crisis programme at the end of March. In return, however, purchases under the regular bond-buying programme are to be expanded. Furthermore, maturing bonds will be purchased under the PEPP until at least 2024. Thus, the ECB retains a high degree of flexibility to deviate from its capital key. Professor Friedrich Heinemann, head of the research area "Corporate Taxation and Public Finance" at ZEW Mannheim, has commented on this topic:

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By far the most applications for the newly introduced German R&D tax credit have so far been made by companies from the mechanical engineering sector. Within manufacturing, every third applicant for the tax credit was from this sector. Almost all mechanical engineering companies that have filed an application plan to use the additional funds to strengthen their research activities. This is the result of a recent survey among mechanical engineering companies by ZEW Mannheim and the German Mechanical Engineering Industry Association (VDMA). At the same time, many companies eligible for the R&D tax credit have not yet applied for it or lack information on how the application process works, what effort it entails and whether it is worthwhile, according to the study’s findings. The goal must therefore be to provide more information and to offer businesses assistance in the application and approval process. In addition, it must be defined more precisely for which R&D expenditures the tax credit can be claimed.

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