Positive outlook shared by German investors as tariff fears subside
Analysts polled by financial data firm FactSet had expected a rise of just 2.7 points.
Sentiment has now more than recovered from its April plunge after Trump announced bruising
"Liberation Day" tariffs
and has reached its highest level since February 2022, before Russia's full-scale invasion of Ukraine.
"Despite ongoing uncertainty in connection with global trade conflicts, almost two thirds of experts expect the German economy to improve," said Achim Wambach, head of the ZEW institute.
The mood appeared to be boosted by "hopes of an early solution to the US-EU customs dispute" as well as of stimulus spending from the German government, he added.
Trump had threatened a blanket 20-percent tariff on EU exports into the United States, but later pushed back its implementation to July 9th to give time for negotiations after markets worldwide plunged.
That deadline was again postponed Saturday, with markets reacting calmly after Trump threatened steeper 30-percent duties from August 1st if the EU did not strike a deal.
In a piece of good news for Chancellor Friedrich Merz's new government, investors' mood also improved when it came to the economy's current performance, with the barometer rising 12.5 points to sit at minus 59.5.
Advertisement
Merz in June
unveiled tax breaks
to incentivise private investment as well as plans to borrow and spend 847 billion euros in a bid to upgrade German infrastructure and boost stagnant growth.
READ ALSO:
German government scraps electricity tax cuts for households
More than 190 analysts and institutional investors took part in the July release of the ZEW survey.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Int'l Business Times
36 minutes ago
- Int'l Business Times
Trump Says Indonesia To Face 19% Tariff Under Trade Deal
President Donald Trump said Tuesday that he had struck a trade pact with Indonesia resulting in a lower US tariff on the country's goods than earlier threatened, alongside better market access. "Great deal, for everybody, just made with Indonesia," Trump wrote on his Truth Social platform, saying that he worked with the country's president directly. He later told reporters that Indonesia was "giving us access" and that goods from the Southeast Asian country would face a 19 percent tariff. Trump did not elaborate on the improved access that he had touted, although he stressed that Indonesia is "very strong on copper" and other materials. The Trump administration has been under pressure to finalize trade pacts after promising a flurry of deals, as countries sought negotiations with Washington to avoid Trump's tariff threats. But the US president has so far only unveiled deals with Britain and Vietnam, alongside an agreement to temporarily lower tit-for-tat levies with China. Last week, Trump renewed his threat of a 32 percent levy on Indonesian goods, saying in a letter to the country's leadership that this level would take effect August 1. It remains unclear when the lower tariff level announced Tuesday will take effect for Indonesia. "We have a couple of those deals that are going to be announced. India basically is working along that same line," Trump told reporters Tuesday, referring to market access. Indonesia's former vice minister for foreign affairs Dino Patti Djalal told a Foreign Policy event Tuesday that government insiders had indicated they were happy with the new deal. Trump in April imposed a 10 percent tariff on almost all trading partners, while announcing plans to eventually hike this level for dozens of economies, including the European Union and Indonesia. But days before the steeper duties were due to take effect, he pushed the deadline back from July 9 to August 1. This marked his second postponement of the elevated levies. Instead, since early last week, Trump has been sending letters to partners, setting out the tariff levels they would face come August. To date, Trump has sent more than 20 such letters including to the EU, Japan, South Korea and Malaysia. Canada and Mexico, both countries that were not originally targeted in Trump's "reciprocal" tariff push in April, also received similar documents outlining updated tariffs for their products. But existing exemptions covering goods entering the United States under a North American trade pact are expected to remain in place, a US official earlier said. Trump has unveiled blanket tariffs on trading partners in part to address what his administration deems as unfair practices that hurt American businesses. Analysts have warned that without trade agreements, Americans could conclude that Trump's strategy to reshape US trading ties with the world has not worked. "In the public's mind, the tariffs are the pain, and the agreements will be the gain. If there are no agreements, people will conclude his strategy was flawed," William Reinsch, senior adviser at the Center for Strategic and International Studies, previously told AFP.
Int'l Business Times
2 hours ago
- Int'l Business Times
Tackling Debt 'Curse', France Wants To Slash Holidays
France's Prime Minister Francois Bayrou said Tuesday he wanted to reduce the number of public holidays as part of an urgent plan to tackle what he called the "curse" of his country's debt. Presenting his outline 2026 budget plan, Bayrou said two holidays out of France's total of 11 could go, suggesting Easter Monday as well as and May 8, a day that commemorates the end of World War II in Europe. After years of overspending, France is on notice to bring its public deficit back under control, and cut its sprawling debt, as required under EU rules. Bayrou said France had to borrow each month to pay pensions or the salaries of civil servants, a state of affairs he called "a curse with no way out". Bayrou had said previously that France's budgetary position needed to be improved by 40 billion euros ($46.5 billion) next year. But this figure has now risen after President Emmanuel Macron said at the weekend he hoped for additional military spending of 3.5 billion euros next year to help France cope with international tensions. France has a defence budget of 50.5 billion euros for 2025. Bayrou said the budget deficit would be cut to 4.6 percent next year, from an estimated 5.4 percent this year, and would fall below the three percent required by EU rules by 2029. To achieve this, other measures would include a freeze on spending increases across the board -- including on pensions and health spending -- except for debt servicing and the defence sector, Bayrou said. "We have become addicted to public spending," Bayrou said, adding that "we are at a critical juncture in our history". The prime minister even held up Greece as a cautionary tale, an EU member whose spiralling debt and deficits pushed it to the brink of dropping out of the eurozone in the wake of the 2008 financial crisis. "We must never forget the story of Greece," he said. France's debt currently stands at 114 percent of GDP -- compared to 60 percent allowed under EU rules -- the biggest debt mountain in the EU after Greece and Italy. The government hopes to cut the number of civil servants by 3,000 next year, and close down "unproductive agencies working on behalf of the state", the premier said. Bayrou said that wealthy residents would be made contribute to the financial effort. "The nation's effort must be equitable," Bayrou said. "We will ask little of those who have little, and more of those who have more." Losing two public holidays, meanwhile, would add "several billions of euros" to the state's coffers, Bayrou said. But the proposed measure sparked an immediate response from Jordan Bardella, leader of the far-right National Rally. He said abolishing two holidays, "especially ones as filled with meaning as Easter Monday and May 8 is a direct attack on our history, our roots and on labour in France". Leftist firebrand Jean-Luc Melenchon of the France Unbowed party meanwhile called for Bayrou's resignation, saying "these injustices cannot be tolerated any longer".
Int'l Business Times
3 hours ago
- Int'l Business Times
Texas Airline Contracted to Deport Migrants By Trump Admin Slashes Flights Amid Financial Struggles
A Texas-based airline that was contracted by the Trump administration to deport migrants has been forced to cut back flights due to financial struggles, months after activists called for a boycott of the company. Avelo Airlines, based in Houston, announced it would be cutting back their operation at Hollywood Burbank Airport in Burbank, California, to just one plane until December 2, when they would close the base entirely, Reuters reported. The company explained the reason for the decision as that it believed the location "will not deliver adequate financial returns in a highly competitive backdrop." Avelo Airlines denied that their conclusion was reached without influence from boycotts or the Trump administration contract. Back in April, Avelo Airlines agreed to a "charter program" with the Department of Homeland Security (DHS) to offer both domestic and international flights for the Trump administration's deportation efforts, as reported at the time by Houston Public Media . Andrew Levy, the airline's founder and CEO, said in a statement that while they understood that the flights, which began with the airline May 12, are "a sensitive and complicated topic," the agreement with DHS offered the company "stability" and security for their employees. After news of the airline's partnership went public, the company faced immediate backlash from critics of the Trump administration and advocates for migrants. The New Haven Immigrants Coalition, a Connecticut-based network immigrants' rights organizations, started a petition that has since garnered nearly 40,000 signatures pledging to boycott the airline unless they ended their contract with the Trump administration. The Association of Flight Attendants-CWA, a flight attendants union with members from Avelo Airlines, issued a statement obtained by the New York Times in May warning that having "an entire flight of people handcuffed and shackled" could "impede" their ability to adequately do their jobs, and presents higher risks in case of an emergency. Homegrown protests have also simply featured protestors organizing outside of airports the airline operates out of, with planned protests continuing into the future. Originally published on Latin Times
