The "Discussion" rubric of ifo Schnelldienst contains contributions from several experts on a current topic. The journal also presents major research results of the Institute, macroeconomic and sectoral forecasts, and the latest results of the Ifo Business Survey.
The journal is published in German language. To help non-German speakers to stay informed on the research activities of the Ifo Institute, we present a short overview of the contents of the main Ifo periodical in English.
Since the outbreak of the financial and economic crisis, an enormous increase in government budget deficits and debt has been seen worldwide. What does this mean for the European Monetary Union? Charles B. Blankart and Erik R. Fasten, Humboldt University, Berlin, consider it desirable "to start with the article on non-dissolvability and to combine this with a procedure similar to that of the euro stability pact. The member states agree to assist restructuring. But if this is fruitless, at the end we have not the dissolution but national bankruptcy. Jörn Axel Kämmerer and Hans-Bernd Schäfer, Bucerius Law School, Hamburg, see the European Union on an extremely narrow ridge. The EU must not soften the bail-out prohibition to such an extent that the exception becomes the rule; this would damage the euro. But it can also not remain inactive since it is likely that the whole system may be jeopardised by the turbulence that develops if a state is denied support. Jörg Asmussen, Federal Ministry of Finance, underscores that the Stability and Growth Pact proved itself to be an effective fiscal policy coordination instrument. During the economic and financial crisis, the pact's flexibility was used in order to allow appropriate fiscal policy responses. However, the rules are now being applied more restrictively. This means that all member states must come to grips on their own with their budgetary and/or structural problems. For Christian Tietje, University of Halle-Wittenberg, the member states of the euro group must continue to be responsible for their own economic policy; financial solidarity measures must remain an ultima ratio in the euro area. Michael Kühl and Renate Ohr, University of Göttingen, are of the opinion that highly indebted countries, such as Greece, must find a way to consolidate their state finances on their own without financial support from the partner countries.
Marc Piopiunik and Ludger Wößmann
According to the PISA studies, approximately 20 percent of all 15-year-olds in Germany are poorly educated "risk pupils". In a study of the Ifo Institute, commissioned by the Bertelsmann Foundation, the economic costs that result from this situation are calculated. The follow-up costs of inadequate education amount to approximately 2.8 trillion euros over the lifespan of children born today - more than total German GDP of 2.5 trillion euros. The tremendous scale of this projection underscores the urgency of reforming the German education system.
Nick Hoffmann and Anja Rohwer
Government regulations are increasingly becoming the determining locational factor for investment and economic growth. The paucity of comparable and analytically conceived information on institutional regulations in the European Union and its member states is being corrected by the gradual expansion of the DICE database of the Ifo Institute. Since 2001 numerous information has been gathered, processed - as tables, graphs or short reports - and made available to the user in the internet free of charge in DICE - the Database for Institutional Comparisons in Europe. At present DICE contains more than 2,200 entries with approx. 8,000 variables. Responses show that this database strategy has been a success.
Manfred Schöpe
The German energy tax law of 2006 introduced a tax on pure biodiesel, which will be increased from year to year. With a current taxation rate of 18.6 cent/litre, cost-covering sales are no longer ensured so that the markets have largely collapsed and existing production facilities are no longer operating to full capacity. The current political discussion is focussing on the problematic nature of an economically adequate taxation. This article examines the extent to which the economic contribution made by the value-added chain "biodiesel" contributes to offsetting the reduced tax revenues.
Christian Breuer and Matthias Müller
The economic and financial crisis in 2008 and 2009 caused budget deficits to swell up in many European countries. As a result of government rescue operations in the banking sector, further burdens in addition to the automatic budget effects have led to an increase in the level of debt. This article presents the debt ratios for 28 European countries in the third quarter of 2009.
Marc Gronwald, Janina Ketterer and Jana Lippelt
At the end of the climate summit in Copenhagen that took place at the beginning of December last year, the "Copenhagen Accord" was passed, since the delegates were not able to agree on a nationally binding treaty. The Accord stipulates that the countries submit their climate goals for 2020 to the UN Climate Secretariat by 31 January 2010. Now that his deadline has passed, we see that very inhomogeneous climate goals have been announced, that major emitters have not named any absolute reduction goals and that the reduction goals of many countries are only very moderate. Against this background the Copenhagen Accord cannot be regarded as a particular success.
Announcement
The 61st Annual Meeting of the Ifo Institute will take place on Wednesday, 23 June 2010, in the Grosse Aula of the University of Munich. As guest speaker Wolfgang Schäuble, Federal Minister of Finance is expected. His talk will be followed by a panel discussion on "Budget Consolidation and Tax Reform". More exact details to follow.
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