Germany moves closer to a government

No excitement, but progress In Germany, the SPD party conference yesterday voted to initiate formal government negotiations with the CDU/CSU. The talks could begin immediately and be concluded within weeks. The result then has to be confirmed by the SPD membership in a referendum, allowing for a new government to take office before easter.  …

United States: kicking the can

A week ago, there was bipartisan bliss. Now Washington has once again descended into partisan theatrics. If bipartisan progress had been made on the draft immigration proposal crafted by Senators Durbin (D-IL) and Graham (R-SC), we probably would not have heard about the President’s foul language just yet. Despite all this, Democrats continue to work…

Washington fireworks

Never a dull moment Those lucky people who spent the first two weeks of the year without Wi-Fi in the Ethiopian highlands or the Amazon jungle have truly missed out on some spectacular Washington fireworks. Many of the events I was expecting later in the year have already materialized, surrealism reached new levels, but there…

Busy bees return to Washington

Congressional leaders returned to work this week with a full plate of legislative leftovers – and with a Republican majority in the Senate reduced to 51-49 after Democrat Doug Jones was sworn in as the junior senator from Alabama. However, Republicans will need 60 votes in the Senate for everything on the agenda. That means…

New Year’s thoughts

Looking ahead at the turn of the year is a favorite pastime for economists. Main scenarios, risks and black swan events are stables on the December festive menu. Does it matter? In some ways no, because the new year is a mere continuation of the old. In others ways it does, because the new year…

Brexit: Christmas peace, new year’s trouble

Now on to the difficult stuff When the European leaders established that “sufficient progress” had been made on phase 1 of the Brexit negotiations, it marked the end of the beginning of the British withdrawal from the EU. The commitments set out in the Joint Report now have to be fleshed out in the Withdrawal…

Tax reform is here

The Republican tax reform will be signed by the President this week. The corporate tax is lowered from 35% to 21% with retailers among the big winners. The top individual tax rate is reduced to 37%, but individual tax measures expire in 2026. The repatriation tax rates of 8% and 15.5% are higher than expected.…

Upset in Alabama

When pigs fly, hell freezes over, and Democrats win in Alabama…   Democrat Doug Jones won yesterday’s special Senate election in deep-red Alabama by 50-48% over controversial Republican Roy Moore. Jones not only won big among black voters and in the big cities, but also flipped more rural and especially suburban counties. The turnout among…

Brexit: tell me what you want

The Brexit debacle this week not only signals trouble in closing phase 1 of the negotiations, but also points to the fundamental problem of Brexit: What is the relationship between the EU and the UK going to look like after March 2019? For the EU it made perfect sense to divide the negotiations into two…

United States: a big, beautiful Christmas present

In the end, the Republican resolve to lower taxes beat whatever concerns individual members had about process and debt. Senator McCain came onboard Thursday, and the last holdouts got what they needed Friday: Daines and Johnson got additional tax relief for small businesses, Collins got assurances on health care and Flake on migration. Senator Corker…