The ZEW Indicator of Economic Sentiment stands at 59.3 points
The ZEW Indicator of Economic Sentiment for Germany decreased slightly in July 2020. Expectations are now at 59.3 points, 4.1 points lower than in the previous month. The assessment of the economic situation in Germany has improved slightly for the second time since January 2020. The corresponding indicator currently stands at minus 80.9 points, an increase of 2.2 points compared to June.
Even before the coronavirus pandemic, Eurosystem central banks were increasingly buying disproportionately large amounts of bonds issued by highly indebted euro area countries. In addition, the rules of the purchase programmes have been continuously relaxed since 2015. These are the findings of a study on the ECB’s sovereign purchase programmes, conducted by researchers of ZEW Mannheim with the support of the Brigitte Strube Stiftung.
Unemployed individuals who become self-employed are, on average, less successful after having received unemployment benefits for a longer period of time. A longer entitlement to unemployment benefits means that many of those affected remain unemployed for a lengthier period. This, in turn, entails negative consequences for the success of the ventures of unemployed individuals. These are the findings of a recent study conducted by ZEW Mannheim and the University of Zurich. “If people feel pressured to become self-employed as a way out of unemployment, they tend to be less motivated and are less likely to be successful,” says Sebastian Camarero Garcia, a researcher in ZEW’s “Social Policy and Redistribution” Department.
German unemployment only saw a moderate rise since the onset of the coronavirus crisis. Meanwhile, an unprecedented number of workers remain in short-time work schemes. As the Covid-19 pandemic progresses, however, unemployment rates are likely to rise. For those affected, unemployment imposes not only economic, but also social costs, which has been illustrated in a recent ZEW expert brief. “Policymakers should therefore give utmost priority to preventing unemployment in order to mitigate the severe social consequences,” says Dr. Laura Pohlan, a researcher in the “Labour Markets and Human Resources” Department at ZEW and co-author of the study.
Virtual South-West Regional Final of the YES! – Young Economic Summit School Competition
There was great excitement surrounding the virtual regional final of the YES! – Young Economic Summit: Who would make it to the grand national final? In the end, two teams prevailed – the Albert-Magnus-Gymnasium Stuttgart mentored by economists from ZEW Mannheim, and the European School RheinMain from Bad Vilbel mentored by SAFE Frankfurt. ZEW President Achim Wambach, who was live on air, emphasised how “great it is that so many teams, so many teachers and researchers continued despite the difficult circumstances.”
Europe's commitment to a single capital market dates back nearly 60 years. Whilst huge progress has been made in terms of developing the Capital Markets Union (CMU), significant challenges lie ahead of us. Only recently, European leaders have begun a series of reforms that will reshape the financial architecture of the Eurozone, and which are crucial if the CMU is to work – the Banking Union and the Fiscal Union.
Without a European deposit insurance framework, however, the Banking Union shall remain an unfinished project. Indeed, there is as yet little consensus as to what a Fiscal Union in the Euro Area should involve. It appears that in the short to medium term, the fate of the CMU rests solely with the European Central Bank.
This Lunch Debate will focus on the prospects of the CMU. Is it possible to create a CMU without first having completed the Banking Union and implementing a Fiscal Union? Are European leaders willing to enforce greater fiscal integration?