Growth in China, Risks in the USA...If the situation in Southern Europe doesn't improve in 2013, the German economy will become even more dependent on consumers in the rest of the world -- particularly in the United States and China.
Concerns about a slump in Chinese growth have eased recently, with the World Bank revising its growth forecast upwards. And demand from emerging economies continues to be good.
But the situation in the US is more difficult. President Barack Obama's re-election has dispelled some uncertainty, but the country's political divide is deeper than ever before. The brinkmanship that saw a deal reached on Jan. 1 on the "fiscal cliff" may have averted disaster, but it hardly inspires confidence in the world's largest economy. And while there may have been a last-minute deal, it is difficult to predict what effect it will have. After the Democrats and Republicans reached an 11th-hour deal on the budget in 2011, rating agency Standard & Poor's responded to the deal by stripping the US of its highest rating.
The shakier the global economy, the more important domestic demand becomes. In Germany, companies have been wavering for some time, with investment in new equipment declining over the past year. Consumers, on the other hand, have been a driver of the German economy, a first in a country that has often been criticized for its heavily export-dependent economy.
"Even during the financial crisis, consumption was solid as a rock," said Ifo's Carstensen. "That was because the labor market was supported by measures such as shorter working hours."
However, at the end of 2012, that mood deteriorated, with the GfK consumer confidence index falling twice in a row, largely because of fears over employment prospects. According to a survey by insurer Allianz, the fear of job losses has increased significantly over the past year. Thus far, many German companies had continued to hire new staff, while existing workers benefited from salary increases secured through collective bargaining agreements. According to Weber, however, "that positive trend in the labor market is broken."
During the 2009 financial crisis, after the federal government introduced its short-time working program, many German companies sucessfully avoided layoffs. And Weber believes 2013 will not see any catastrophic plunge. "There will be no major downturn," he says, but rather "more of a long, drawn-out dampening."
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Romanian government presents program: Average economic growth of 3% in 2013-2016, budget deficit below 3%
de V.O. HotNews.ro
Joi, 20 Dec 2012 English | Business
The newly designated government of Romania, formed of the Social Liberal Union (USL) alliance and led by Victor Ponta, eyes an average annual economic growth of 3% for 2013-2016 and maintaining an ESA-system budget deficit of under 3% until 2016, according to the USL governing program, published by the government on Thursday. On fiscal policies, the government says it plans to provide transparency for public funds, to simplify the tax system, to return to a 19% VAT and introduce progressive taxation.
More commercial banks may be allowed to set up fund management companies under a pilot program that has been approved by the State Council, the China Securities Regulatory Commission, the country's securities regulator, said on Dec 25.
As many as eight fund management companies have been set up by commercial banks among a total of 73 fund management companies in the country.
The participation of more banks in the pilot program will help to develop more channels for savings to be orderly transferred into the capital market, increasing the number of institutional investors, boosting the development of the funds industry, and bringing more experience to the operations of urban commercial banks, the CSRC said.
The issuance of fund products has been facing difficult times in recent months, but fund companies set up by banks have a higher market share due to their easy access to clients and more opportunities to recommend fund products to buyers, analysts said. The involvement of more banks in the pilot program will also bring fiercer competition to the fund products market, the analysts added.
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