BERLIN | Alberto Lozano | While German Finance Minister Wolfgang Schäuble preaches public budget consolidation all around the Eurozone, some Länder don’t seem to be taking his prescriptions seriously. Their deficits continue to grow in 2014 and moving away from the zero deficit goal in 2020 as required by the country’s constitution.
BERLIN | By Alberto Lozano | The ECB and ‘peripheral’ countries cannot do all the work by themselves. The eurozone needs to move away from deflation and to emerge definitely from recession with a sustainable growth. As the International Monetary Fund recently concluded about Germany, the EU biggest economy could “strengthen its role as an anchor of regional stability.” But could more investment in Germany have a real impact in their neighbour’s economies?
The Corner Analysis | In the grim day in which the French National Front victory broke the expectations of a more united and strong Europe, Spaniards broke the bipartisan establishment for the first time in 35 years. Podemos, born from the Indignados (outraged) movement, was the biggest surprise in the political arena. Voters weary of austerity measures and corruption also punished the political establishment in Greece. Eurosceptics and xenophobe movements dangerously gained strenght in Denmark, Austria, Finland and the UK.
BERLIN | By Alberto Lozano | It’s not all about the deficit. If the eurozone wants to achieve the goal of sustainable growth, Germany also needs to shorten its chronic current account surplus, the world’s largest, which has led the country to accumulate capitals abroad amounting 100% of its GDP. Although this means dismissing one its economic miracle recipes -wage moderation-, Merkel will increase public workers’ salaries by 3% this year, +3X inflation.
BERLIN | By Alberto Lozano | The German ambitious switch from nuclear and carbon-based energy toward renewables remains the biggest challenge for the first EU economy. The country’s industrial sector and consumers are worried about how much they will have to pay in terms of prices, competitiveness and jobs.
BERLIN | By Alberto Lozano | The upcoming EU elections (May 22-25) arrive in a moment of enormous challenges for the Union. What happens in the next months can change definitely the political and economic landscape. Again, Germany plays the main role with its 67 million of voters and the two ‘frontrunners’ supported by the two big parties from the German Coalition. However, 72% of its citizens have low or no interest in the polls.
BERLIN | By Alberto Lozano | Europeans never stop listening to ideas for economic reforms. One potentially successful option, with support from Europe’s leading institutions for smaller economies, is the ¨minijob¨.
But are these atypical jobs the solution to move Spain’s 26 percent unemployment rate closer to Germany’s 5 percent?
BERLIN | By Alberto Lozano | German Council of economic experts (‘the Five Wise Men’) upgraded its forecast for the country’s GDP growth in 2014 to 1.9 percent from its previous expectation of 1.6 percent in November last year. However, the last Ifo’s data show that global events like Crimea crisis and a slowing Chinese GDP growth can badly impact the euro zone’s engine.
BERLIN | By Alberto Lozano | Germans are worried, with good reason. Germany is the second fastest-aging country in the world, and between now and 2030, Germany’s population is forecasted to decrease from 81 million to around 77 million, and fall a further 12 million to 65 million by the year 2060, according to a recent study by Berenberg Private Bank and Hamburg Institute of International Economics (HWWI). How can Europe’s engine face this challenge?
BERLIN | By Alberto Lozano | While Germany was receiving criticism from all sides for its surplus current account, its industry continued setting records and exporting its products all around the world and Euro zone was still strengthening its pillars for a brighter future.