Politics

What can we expect from the European Reconstruction Fund?

  After a long struggle at the EU summit there was the longed-for agreement on a European „Solidarity Fund“. The aid fund or the new Recovery and Resilience Facility (RRF), as it was called in the summit’s final document, is to amount to 750 billion euros, as proposed by the EU Commission – but its composition has changed. Instead of EUR 500 billion in non-repayable grants to member states and EUR 250 billion in loans, the total amount of grants is now only EUR 390 billion. In 2021 and 2022, 70 percent of the funds are to be disbursed and in 2023 the remaining 30 percent of the funds are to be disbursed again. Allocations under the facility in the years 2021-2022 will be determined according to the Commission’s allocation criteria, taking into account the respective standard of living, economic size and unemployment in the Member States. For allocations from…

More power for the headquarters

The new EU aid fund – or thMore power for the headquarterse new Recovery and Resilience Facility (RRF), as it was called in the summit’s final document – is to amount to 750 billion euros as proposed by the EU Commission. Over the next three years, the fund will provide EUR 390 billion in grants and EUR 360 billion in loans to member states. To finance this programme, the EU Commission will be authorised to issue its own bonds on behalf of the EU and place them on the capital market. This gives the EU the opportunity for the first time to refinance itself by raising its own loans on the capital market. The debt service for the new EU bonds will then be handled by the EU budget, which in future will also have its own tax revenues: From 2021 a tax on disposable plastics is to be introduced,…

US economy needs consumer incentives

In the USA there is to be a new economic stimulus package soon, politicians agree on that. This is important because the economy is still in a deep crisis: While many economic indicators in June pointed to a strong recovery, the last few days have seen the first disappointments: The consumer climate at the University of Michigan, for example, deteriorated in July compared to the previous month. Given the dramatic increase in new corona infections, consumer uncertainty is hardly surprising. However, the still high unemployment figures – initial applications for unemployment benefits have even risen again recently – and the imminent expiry of additional unemployment benefits are probably depressing consumer sentiment at present. There is still disagreement about the concrete form of new measures. At least the Republicans have now obviously come closer together: According to their wishes, the new aid package is to weigh around 1 trillion US dollars,…

EU agrees on Corona aid package

It was another tough wrestling match in Brussels. The positions were very far apart at the beginning of the negotiations and the climate in the negotiating room must have been rather undercooled. But at least there was the Franco-German proposal for a „reconstruction fund“ of 750 billion euros, which was intended to benefit the states particularly hard hit by the Corona crisis. Particularly controversial was the allocation of the sum to grants or loans. Originally, 500 billion euros were to be disbursed as non-repayable grants and 250 billion euros as loans. The breakdown has now changed to 390 billion euros in grants and 360 billion euros in loans, after the „Thrifty 4“ (the Netherlands, Austria, Denmark and Sweden) insisted on a reduction in the grant amount. There are also conditions for the use of the aid payments, which are to be based on the economic policy recommendations of the EU…

At home – 4 companies that can benefit from the new life

The Corona pandemic has changed our lives dramatically. The changes associated with the appearance of the virus now affect most areas of our daily lives. Whether in the world of work, in the organisation of our leisure time or in our consumer behaviour – we are suddenly confronted with new challenges. For many industries and companies, these new conditions mean high levels of uncertainty and risk. On the other hand, there are also opportunities for those who are appropriately prepared for the „new normality“. We have looked into the subject areas of entertainment, mobile working, DIY stores and online shopping and identified a few companies. Four companies in particular caught our attention. Take-Two, one of the largest video game groups in the world, TeamViewer, as an extraordinary beneficiary of the trend towards the home office, Hornbach Holding due to the boom in do-it-yourself and Amazon as one of the world’s…

The second wave

The dynamics of the corona pandemic are increasing and the number of newly infected people is reaching new highs at global level. The USA and South America are particularly affected, while in Europe the spread of COVID-19 appears to be under control. Of course, this could change quickly if we become increasingly careless. The political reaction function has changed in recent weeks. In general, the political willingness for nationwide countermeasures has decreased. If one has to react politically to the corona virus, one now tends to regional restrictions. In addition, the overall sustainability of health systems has increased. A nationwide lockdown has thus become unlikely. Especially since the decision for a renewed national lockdown would entail a very high economic price. The renewed recession would be deep and probably also relatively tenacious, as uncertainty would rise sharply and the scope for fiscal and monetary policy has already been largely exhausted….

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