Press

German companies have somewhat more difficulty obtaining new loans, according to surveys by the ifo Institute. In June, 27.1% of companies in ongoing credit negotiations reported restraint on the part of banks; in March, the figure was 25.2%. Caution rose particularly sharply in the construction industry and manufacturing. “In view of weak investment in Germany, easier access to loans would be desirable,” says Klaus Wohlrabe, Head of Surveys at ifo.

German economists are divided on the planned EU tariffs on cars from China. 33 percent of the participants in the ifo Economists Panel consider the EU’s planned countervailing duties just right for counteracting the Chinese government’s subsidies. 11 percent want lower tariffs, six percent want higher. At the same time, 33 percent of the professors think that no countervailing duties would be appropriate. Above all, they cite the risk of an impending trade war. They argue that tariffs would not eliminate the dominance of Chinese electric cars, and that European manufacturers would not become more efficient as a result of tariffs. “Dealing with China is challenging. Geopolitical risks, responses to China’s economic and export strategy, and maintaining free trade must be weighed against each other,” says Niklas Potrafke, Director of the ifo Center for Public Finance. 

Reintroducing military conscription in Germany could cause macroeconomic costs in the billions, as a study by the ifo Institute on behalf of the German Federal Ministry of Finance concludes. The study examines the costs of military conscription in three scenarios. If conscription affects an entire age cohort (100 percent), economic output (gross national income) would be expected to fall by 1.6 percent or just under EUR 70 billion. If, as with the old conscription, just under a quarter of an age cohort were to be conscripted, economic output could fall by 0.4 percent or EUR 17 billion. If just five percent of an age cohort is conscripted, the decline is 0.1 percent or EUR 3 billion. “Conscription as part of a mandatory social year would cause annual economic costs that are of roughly similar size as the combined funds from the defense budget and the special fund for the German Armed Forces in 2024,” says ifo military expert Marcel Schlepper.