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May 20, 2021

Eurozone government debt - Quo vadis from here?

The fiscal version of “whatever it takes” triggered a notable deterioration in public finances across the Eurozone in 2020. However, the picture has never proven more heterogeneous at the country level: Seven countries (Greece, Italy, Portugal, Spain, Cyprus, France and Belgium, together representing more than 50% of Eurozone GDP) now boast debt-to-GDP ratios close to or above 120% of GDP i.e. twice the Maastricht debt target.

May 19, 2021

Abolishing fuel subsidies in a green and just transition

Abolishing fossil fuel subsidies and directing the funds to renewable energy seems like an easy win for the climate: After all, fossil fuel subsidies account for 0.5% of global GDP, almost exactly the size of the funding gap needed to comply with the Paris Accord. But getting rid of them comes with steep costs for consumers, particularly the poorest households. 

May 14, 2021

Drivers of growth: Property & Casualty insurance

Nominal GDP growth explains 61% of global gross written P&C insurance premium development between 2009 and 2019. At the country level, however, results are more dispersed.

May 12, 2021

Allianz Global Insurance Report 2021: Bruised but not broken

According to the latest Allianz Global Insurance Report, the insurance industry got off relatively lightly during the Corona crisis: in 2020, global premium income fell by only 2.1%. Property insurance even recorded a small increase of 1.1%, while life business slumped by 4.1%. 

May 07, 2021

Pricing superpowers: Which sectors have them in the Eurozone?

In the long run, most sectors have (some) pricing power. By comparing the evolution of retail prices with changes in producer prices, we find that only five out of 19 sectors (textiles, household appliances, cleaning products, telephone services and restaurants) lack long-term pricing power. We also find that consumer electronics, pharmaceuticals and airlines have the most pricing power among our sample. 

May 05, 2021

Germany´s constitutional court: Reincarnation under the climate veil of ignorance

The fiscal burdens from Germany’s ambitious climate policies pile up only after 2030. In recognizing this, and labelling the 2019 climate protection law as partly unconstitutional as a result, Germany's Constitutional Court attempts to hardwire future generations’ interests into the political process. 

Apr 29, 2021

European households: The double dividend of excess savings

In 2021, the glut of excess savings could generate a double dividend for the Eurozone: first, a consumption boom of EUR170bn, or 1.5% of GDP. In 2020, gross savings in the Eurozone increased by more than +50%, and “excess savings”  stood at more than EUR450bn, or over 4% of GDP, thanks to reduced spending on services amid renewed lockdowns.

Apr 26, 2021

Equity markets: In search of Goldilocks' inflation


What effect do changes in inflation have on equity performance? What do we expect moving forward? Historically, monetary and fiscal easing periods tend to be favorable for equity investors, as equity tends to generate decent returns in periods of accelerating, but still manageable, reflationary pressures.

Apr 22, 2021

Investment is back: Harder, better, faster, stronger?

In the short run, a demand catch-up and the reduction in spare capacities will drive a business investment recovery… With the progressive easing of sanitary restrictions, normalizing capacity utilization levels will push up business investment by +18.4% in the UK, +5.4% in France, +4.0% in the US and +2.5% in Germany.

604 releases in total