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02 July 2007

EZA 798 Consultancy Note:




Germany
German central labour office – rising surplus The German labour office will record a larger than expected surplus this year; the Kiel economic institute (ifW) forecasts a surplus of € 5.5 bn (0.2% of GDP) after 0.4% last year. The main reasons are the cut in active labour policies, lower subsidies for business startups and declining unemployment benefit payments. Chancellor Merkel will fight off demands for cross-subsidy to public health care; instead aiming for debt reduction and lower contributions next year.

Asset conclusions: dependent on the use of the expected surplus funds, but most likely option – CDU proposed cut in unemployment contributions - would be positive both for bonds and equities.



© Graham Bishop

Documents associated with this article

EZA798.pdf


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