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China is gradually regaining its old growth strength

After the deep corona crash at the beginning of the year, the Chinese economy continued its strong recovery over the summer months. Annual economic growth accelerated from 3.2 to 4.9 percent in the third quarter and is thus not far off its previous growth path. By the second quarter, China had already restored its pre-crisis level of economic output. For the year as a whole, there are now signs of growth of around two percent compared with 2019. This makes China one of the very few countries that will even achieve a positive growth rate this year compared to the previous year, and once again proves to be the global economic locomotive. One positive aspect is that the momentum of the recovery has continued until the very end. Both industrial production and the retail trade were able to accelerate their growth significantly in September. The economic climate has recently brightened…

Brexit: Benefits of a trade agreement must be made clear

The free trade talks between Great Britain and the EU have been stalled for months, but since last week they have reached a new low. The brexite drama is back. Once again, everything seems to be heading for a no-deal brexite that would set British trade relations with the EU back to WTO level in an unregulated way. The economic losses that would then be expected for Britain do not seem to play a major role in Boris Johnson’s political calculations. Or are they just not high enough compared to the loss of prosperity that would also be feared if a free trade agreement were successfully concluded? The fact is that Britain’s withdrawal from the internal market will once again create numerous barriers in trade with the EU that were long removed. Some of these barriers to trade could be avoided with a free trade agreement, especially the reintroduction of…

Brexite: Johnson on collision course with the EU

The 8th round of negotiations between the EU and Great Britain on the planned Free Trade Agreement (FTA) will end tomorrow. Negotiations have been underway since the end of February, but have so far been unsuccessful. And this round of negotiations should not be any different. Instead of moving towards each other, the negotiating parties seem to drift further and further apart. Prime Minister Boris Johnson has now also set a hard deadline for the EU summit on October 15. Should the basic structure of an agreement not be in place by then, he wants to prepare his country for a hard brexite. Potentially even more problematic than this deadline is a new draft law that was presented in parliament yesterday. The Internal Market Bill sets out the government’s plans for smooth trade within the UK after the brexite or after the end of the transitional period at the end…

Corona crisis spurs crypto currencies

At the beginning of the Corona pandemic, crypto currencies looked like clear losers of the crisis. However, this has gradually changed since mid-March, and even the recent drop in Bitcoin’s share price back into the USD 10,000 range does not change this. The expansion of expansive monetary policy observed worldwide and the fiscal programs of historic proportions have probably made a significant contribution to the positive momentum. The mix of escalating government debt ratios and, at least in the long term, considerably increasing price pressure has apparently led investors to look for investment opportunities outside the euro, US dollar and other currencies. Numerous crypto-currency proponents also assume sustainable, corona-induced changes in people’s behavior, which would have led to a higher general acceptance of block-chain-based currencies. The background is an assumed structural break in the form of a digitalization push, which has been triggered by increasing web conferences, home office and…

The brexite won’t let us go

The brexite that kept us so busy last year is still not off the table. Talks on a free trade agreement (FTA) between the UK and the EU have stalled. Today, a summit meeting is expected to bring new momentum to the talks. According to its own statements, however, the British government under Prime Minister Johnson would also accept a no-deal brexit if the talks did not go according to its ideas. London also strictly rejects an extension of the current transition phase. It is a déjà vu: once again, Great Britain is heading for an unregulated withdrawal. The effects of a „No FTA“ Brexit on the British economy would be similarly serious as those that the so-called No-Deal-Brexit would have had last year: trade between the two economic areas would take place from one day to the next only on a WTO basis, customs duties and border controls would…

The Merkel-Macron Plan: The first step on the way to a transfer union

  There is movement in the discussion about an EU reconstruction fund. Based on the Franco-German proposal, the fund is to have a volume of 500 billion euros, be managed by the EU and be launched in a few months‘ time. Brussels would also decide alone on how the money is to be used, but this would be based on how badly the recipient states are affected by the crisis. Contrary to what was initially demanded by Berlin, the fund would provide grants rather than loans and would be conceptually similar to the EU’s Cohesion Fund. This also explains why it should be smaller than previously discussed. To finance the money, the EU would first issue bonds on the financial market. This would require the approval of the national parliaments. However, the EU’s debt is to be gradually reduced over the next few years through higher financial contributions to the…

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