The Berlin Update: 26 January 2012

by Ares Kalandides

Starting this week, you will regularly find here a commented selection of news about (or from Germany) that have a geographical (or geopolitical) focus. I don’t need to stress that it is my own very biassed choice:

___________

Growing inequality among German states (Länder), Handeslblatt, 17th January 2013

Equalization payments among German states, 2011. http://www.br.de/themen/aktuell/laenderfinanzausgleich112.html

Equalization payments among German states, 2011. Blue are receiver and red are giver states. http://www.br.de/themen/aktuell/laenderfinanzausgleich112.html

The German financial system is based on equalization payments (Finanzausgleich) among the 16 States with the objective of offsetting differences in available revenue or in the cost of providing services. They are calculated based on the “fiscal gap”, i.e. the difference between fiscal need and fiscal capacity. Handelsblatt reports on the growing inequalities among German states, where by now, only three (the “South”) are on the giver side and 13 on the receiver. Nordrhein-Westfalia changed sides already in 2010 (to the receiver side) and in 2011 Hamburg followed for the first time in its history.

You can read the whole article (in German) here: http://www.handelsblatt.com/politik/deutschland/laenderfinanzausgleich-nur-noch-drei-bundeslaender-zahlen-ein/7644414.html.

___________

Rising real estate prices, Frankfurter Allgemeine Zeitung (FAZ), 20th January 2013:

19th century residental buildings in Prenzlauer Berg (Berlin), one of the areas where luxury refurbishment is prohibited.

19th century residental buildings in Prenzlauer Berg (Berlin), one of the areas where luxury refurbishment is prohibited.

Rents in German big cities are rising rapidly. There are rises of 28% in Berlin, 23% in Hamburg, 17% in Frankfurt and 16% in Munich for new rental contracts, while buying a flat in Berlin is now 73% more expensive than it was five years ago.  There are several policy attempts to control rising prices: In Berlin, the municipality of Pankow (which includes Prenzlauer Berg), has prohibited luxury refursbishment while in Frankfurt the mayor has decided to set a rent limit.
Read more here: http://www.faz.net/aktuell/wirtschaft/wirtschaftspolitik/armut-und-reichtum/steigende-immobilienpreise-der-neue-haeuserkampf-12031094.html

__________

German export surplus is becoming an instability risk for the EU, Der Spiegel, 21st January 2013

Container ship in Hamburg

Container ship in Hamburg

Not only huge trade deficits, but also large trade surpluses are stability risks for Europe. Germany’s trade surplus in 2012 rose above the warning limit of 6% set by the European Commission. In Euro this means a trade suprlus of 169 Billion or 6.4% of the GDP. For 2013 the Ifo Institute is expecting a further rise at 6.6 %. Only China has a larger trade surplus than Germany and Saudi Arabia follows in the third position. Since trade is always relational, one country’s surplus means somebody else’s deficit.

Read the whole story here: http://www.spiegel.de/wirtschaft/soziales/exportueberschuss-deutschland-verletzt-eu-warngrenze-a-878787.html

___________

 “What are the German Bankers Thinking?” in The Real News, 21st January 2013

___________

Family background has a large influence on people’s future chances, DIW, 23rd January 2013.

A teacher writes on the blackboard durin

Research by the DIW (German Institute for Economic Research) has shown that in Germany the socio-economic family background has a decisive role in people’s professional chances. Using a method to quantify home influence, the DIW calculates it at 40% of the total factors influencing a person’s income and about 50% in education. This means that in Germany upward mobility chances are rather low. Internationally Germany stands at the bottom end of the scale, at a comparative level with the US.

You can read more here: http://www.diw.de/sixcms/detail.php?id=diw_01.c.414647.de

_______

“Instead of ‘Made in Germany’ it should be called ‘Made in the World’, Deutsche Wirtschafts Nachrichten, 25th January 2013.

The common trade balance analyses show France at the top of countries that import German products. OECD and WTO see the USA at the top. (Graph: OECD)

The common trade balance analyses show France at the top of countries that import German products. OECD and WTO see the USA at the top. (Graph: OECD)

A new study by the OECD and the WTO shows how global production chains change the way we need to think of “places of origin”. Only a part of a German BMW car that is exported to the US is actually produced in Munich. Calculating the real country of origin, this new study allocates about 1/3 of German products to third countries.  Using this new method, it is the US, not France, which is the number one trade partner of Germany. A description of the methodology can be downloaded here: http://www.oecd.org/sti/industryandglobalisation/49894138.pdf

Read the German article here: http://deutsche-wirtschafts-nachrichten.de/2013/01/25/oecd-statt-made-in-germany-muss-es-made-in-the-world-heissen/

This entry was posted in The Berlin Update and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s