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Throughout Europe, the coronavirus crisis has had severe economic consequences, although they differ in type and scope between countries and regions. The EU Commission has responded to the crisis with an array of policy instruments. As the contours of a general strategy have begun to take shape, the Commission is in the process of planning an EU-wide recovery fund. 

Margrethe Vestager, Executive Vice-President of the EU Commission, has expressed concern about the “big differences” in state aid granted by the Member States in connection with the coronavirus pandemic. In particular, she fears that Germany’s aid programmes are giving its companies an advantage over those in countries whose governments cannot afford similar levels of support.

The world has changed dramatically over the past few weeks: countries everywhere have issued exit restrictions, many companies have halted operations, stock exchange markets are in turmoil, economic forecasts range from bad to terrible, and governments have approved unprecedented rescue packages. 

The German Bundestag and the Bundesrat have approved the biggest rescue programme in the history of the Federal Republic of Germany. With a volume of up to 600 billion euros, the Economic Stabilisation Fund (WSF) aims to intervene in the economy and support German businesses during the difficult times amid the coronavirus pandemic. While the federal government’s swift and determined action is to be welcomed, greater account should be taken of the lessons learned from the financial crisis that began in 2007, argue ZEW President Professor Achim Wambach and Klaus Schmidt, professor at the University of Munich and chair of the Board of Academic Advisors to the Federal Ministry for Economic Affairs and Energy. 

The Federal Ministry for Economic Affairs and Energy has submitted a draft proposal for the 10th Amendment to the German Competition Act (GWB) – the cornerstone of the social market economy. Otherwise referred to as the ‘GWB Digitalisation Act’, the amendment reflects how digitalisation is dramatically changing the way we do business. But one important step remains. After a long delay, the draft proposal has been published, and opinions from professional associations and the states will soon be heard. This is the second amendment aimed at integrating the special features of the digital economy into competition law. While the 9th amendment to the GWB integrated the terms ‘data’ and ‘platform’ into the GWB, the present draft shows how radically these concepts have altered our economy. 

At her annual New Year’s address, the German Chancellor Angela Merkel renewed her commitment to climate action: “I will do everything in my power to ensure that Germany does its part – ecologically, economically, societally – to get climate change under control.” Climate policy is becoming increasingly important in Germany. In August 2019, the Cabinet passed the Structural Development Act for German coal-mining regions; three months later, it rolled out a new climate bill. What is more, federal and state authorities recently agreed on a timetable for phasing out coal.

It was one of the longest booms in post-war history. Since 2009, Germany’s gross domestic product (GDP) has grown year after year. Per capita GDP today is 33 per cent higher than it was ten years ago. But now growth has stalled. Following a 0.1 per cent quarter-on-quarter decline in GDP in the second quarter, GDP is expected to shrink again in the third quarter. The German Federal Statistical Office, which publishes its quarterly figures on 14 November, may declare a “technical recession” – a decline in GDP over two consecutive quarters. Should the government take steps to stimulate the economy?

On October 24, Mario Draghi chaired his last meeting of the European Central Bank’s (ECB) Governing Council. After eight years as president, Draghi will depart from the ECB at the end of the month, having shaped it like no one before him. ZEW President Achim Wambach looks back on Draghi’s tenure as head of one of the world’s most important central banks.

Joining recent expert forums in Brussels, Canberra, Chicago and London, the German government in September set up the Berlin commission “Competition Law 4.0” to develop proposals for creating a regulatory framework that meets the challenges posed by the digital economy. Government agencies all around the world, including those in the United States, have ramped up efforts to reign in the leading online digital platforms and pass new competition law for the digital age. In Germany, legislators are currently working on the tenth amendment to the country’s Act Against Restraints of Competition (GWB), which like the previous set of revisions devotes much of its attention to the digital economy. From all these efforts, guidelines for an economic order for the digital economy can be derived.