The steep rise in oil and food prices seen until recently, which prevented a pickup in private consumption, was the main reason behind the weak second quarter. We now see a pause in growth in Germany, but not a recession. Nonetheless, this is not the time for a stimulus package. What would help would be tax relief for those on lower and middle earnings. These tax cuts should be financed by stretching out the budget consolidation process. Additional spending from windfall tax revenues in 2007 and 2008 should also be scrutinized. / Only available in German.

The end of the financial market crisis is still some way off. Worst hit by the crisis, apart from US homeowners, are the shareholders of the affected banks. The German economy is not escaping unscathed either but is relatively well placed. The “man on the street” is groaning most under the pickup in prices in recent months, but inflation should start to ease next year at the latest. Even if there is no alternative to globalization, in the wake of the subprime crisis fresh thought needs to be given to some market mechanisms. / Only available in German.

The financial market crisis is likely to prove to have been the key trigger for the long overdue consolidation of the German banking market. There is much to suggest that the German banking market will emerge strengthened from the crisis. There is growth potential both on the investment and the financing side. A winning formula for banks in Germany could lie in the provision of various forms of capital to SMEs. In the wake of the financial crisis the subject of “security” is gaining in importance; this favors risk-oriented and conservative business models. For the German banks with a large stock of valuable claims the backdrop is therefore better than in recent years when product innovations mushroomed. / Only available in German.

The ongoing surge in commodity prices, with agricultural commodities also spiking again of late, has become the number one risk for the world economy. In the short term little can be done. The high prices also reflect shortages and provide incentives to curb usage. This, coupled with the slowdown in the world economy, will dampen demand for commodities and hence prices. Against this backdrop, the central banks must not neglect their efforts to stabilize the situation, even if doing so deals a further blow to the economy. The economy looks set to hit a weak patch and the financial markets face highly volatile times. / Only available in German.

Despite its commodity riches Ecuador is one of the poorer Latin American countries. Oil production and agriculture are the hallmarks of the economy. At the moment the global economic backdrop is the best it has been for decades for such countries. High commodity and food prices should finally be giving Ecuador something of a boost. However, the opposite is happening: the country is slipping further and further down the international league. Poltical uncertainty is leaving deep marks in the economy. In 2007 growth is estimated to have been only 2.7 % real. This is one of the lowest growth rates in the region and for Ecuador itself the lowest in recent years. / Only available in German.

Despite the risk of further setbacks, the global financial crisis is now deemed manageable. Sentiment on the stock markets has brightened up, the German economy got off to an unexpectedly good start to the new year. Encouragingly, domestic demand is now also contributing to the upward trend, helped above all by the labor market. And, despite all the difficulties, corporate profits are also set to rise again this year. This is a success. So the backdrop is not all that bad at all, if it wasn’t for the stubbornly high oil price. But there is also good cause to hope that the slowdown in the world economy will place a lid on the soaring oil price. And as the financial crisis gradually fades, share prices will also pick up by year-end amid fluctuations. / Only available in German.

The global financial markets are extremely important for the prosperity of us all – despite the recent aberrations. The resulting financial crisis has prompted a return to normality, with lending standards, for example, now more stringent again. There is no question of a credit crunch, although loans will become more expensive – particularly for firms with a low credit standing. The idea of setting up a global financial watchdog to tackle the global financial crisis is unrealistic. So far the crisis has not dented the German upswing. The strong first quarter – buoyed by the labor market – is likely to help push this year’s growth up to 2.4 %. / Only available in German.

In recent weeks Georgia has been in the headlines mainly due to its tense relations with Russia. However, aside from the political rumpus, there is also a success story on the economic front. Numerous reforms have improved the investment climate and are attracting foreign investors’ interest. This has resulted in average annual economic growth of 10 % in the past three years. German investors are leading the way – thanks on the one hand to the close cultural links between the two countries and, on the other, to the fact that Germany is now Georgia’s fourth largest trading partner. / Only available in German.

Although financial markets have calmed down to a certain extent, the situation on the interbank money market remains tense. For this reason the Bank of England (BoE) has assumed the functions of the money market. Although this move came under fire from many sides, it was indeed the right decision if one looks at the alternatives. However, the liquidity provided by the BoE will have to be withdrawn again at some stage. This will be the litmus test for a stability-oriented monetary policy. / Only available in German.

The German economy is robust and growth will top the predictions of many a forecaster. Germany does not have an overheated housing market – not least thanks to a more conservative housing finance regime – domestic businesses have enhanced their competitiveness and are coping with the strong euro better than others. Sentiment on the financial markets is much more negative than in the business sector as a whole. By the end of the year the Dax could be back flirting with the 8000 mark, the labor market should continue to perform well; however, on the wage front, the pendulum must not be allowed to swing too far in the other direction. / Only available in German.

In their accounts for the 1st quarter German banks will also report further writedowns. Credit markets are only going to bottom out once the US housing market has stabilized. The necessary fresh capital will increasingly be provided via the normal channels – i.e. via private investors and not via government assistance. More than external controls, the painful losses are likely to be incentive enough to tidy up internal systems. Although the dislocations on the capital markets are taking their toll in Germany as well, the upswing remains intact. / Only available in German.

Raising the statutory retirement age is above all needed to stabilize contribution rates; in addition the importance of growth potential has been highlighted of late, as delayed retirement boosts the labor force potential. Moreover, the current debate is increasingly focusing on aspects of intergenerational fairness or equal treatment. The expected average pension duration and the cohort-specific implied return on statutory pension insurance are used as criteria for equal treatment. For example, those born in the sixties and seventies show the lowest implied return, whereas younger generations (1980 and younger) enjoy a higher return – a clear case of unequal treatment. / Only available in German.

Someone who's been asleep the past few months is in for a shock when catching up with the economic news. Not just because the value of his shares has taken a pummeling and the euro is close to USD 1.60, but also because there seems to have been a shift in economic power. White knights from the Middle East and Asia have been riding to the rescue of western financial icons such as UBS, Citigroup, Morgan Stanley and Merrill Lynch. So, having rubbed his eyes in disbelief, our sleepwalker will ask whether this is something he needs to fear. The answer is no, at least not directly.

A radical shakeout and consolidation in the financial system is on the cards. Although the markets have sufficient liquidity at their disposal, the necessary trust between market participants is shaken. The key issue now is to come up with a – government coordinated – solution to sort out the subprime mess. / Only available in German.

The present crisis on the financial markets will not lead to a global economic crisis. Although the USA is likely to slip into recession temporarily, the second half of the year could surprise on the positive side. The impact on Germany is unlikely to be too severe, with the economy set to grow by 1.8 % in 2008. Rising prices and more or less flat wages are weighing on consumers. However, this year’s wage round offers more room for maneuver than in recent years. Ultimately, this should also benefit private consumption. / Only available in German.

Against a backdrop of rising energy and food prices, minimal pension increases and meager pay rises mean that the consumer is left with less and less in his pocket. Given the global competition faced by German firms, real wages will rise only modestly in the next ten years as well. The government should therefore provide tax relief for those on small and medium incomes. / Only available in German.

It would be misguided to paint longer-term crisis scenarios out of the current financial market turmoil. The economic backdrop does not point to a global recession. After years of euphoria what we are seeing is a hefty but necessary consolidation of the financial markets. This in turn unleashes counterforces, for instance lower interest rates. In America the massive boost from monetary and fiscal policy will presumably spur domestic demand in the course of the year, as long as the oil price does not take off again. / Only available in German.

In Jordan things are going well, on the political and, above all, on the economic front. Over the past ten years the economic upswing has boosted the prosperity of broad swathes of the population despite high population growth. Inflation has fallen of late and public-sector debt has also eased, although it remains high by international standards. Both the trade and current account balance are heavily in the red; this is mitigated somewhat by the inflows of foreign direct investment. The greatest risk facing the country is indeed its reliance on international capital inflows. Economic policy is focusing on privatization, the establishment of cutting-edge industries and the development of tourism. With a share in imports of just under 8 %, Germany is one of the major suppliers behind Saudi Arabia (oil) and China. For investors from Germany, Jordan is interesting as a regional location to tap into neighboring countries. / Only available in German.

At present the financial markets seem to be expecting a further deterioration in the US economy. But settling-up time is not until the end of 2008. By then the financial market picture could have shifted dramatically, prompted for instance by an unexpected comeback in the US. Moreover, the temporary slowdown in the USA will have only a modest impact on the world economy. International equity markets look set to bounce back strongly in the second half of 2008. On the bond markets the fear premium sparked by the financial market crisis is likely to disappear gradually or at least shrink markedly. We expect yields to pick up in both the USA and the euro area. / Only available in German.

The current slide on the stock exchanges is exaggerated. On the economic front the news is not only bad. For instance, the Fed’s rate cuts will help to boost consumption and investment demand. The ECB should stand pat for now, a further rise in the euro as well as a further drop in the oil price would provide scope for a rate cut. / Only available in German.