ECB’s Nagel unveils a 12-point vision for German reform

This speech is a bit out of the central bank’s lane. With Mark Carney about to be named Prime Minister, expect a few more central bankers to start sounding like politicians.

In this speech German Bundesbank President Joachim Nagel outlined a 12-point plan to boost German growth.

• The ECB rate cut of 25bps in March was appropriate given progress on price stability
• Germany’s potential growth has fallen to just 0.4% annually – a full percentage point lower than in the previous decade

Here are the 12 points:

1. Increase part-time workers’ hours by reforming tax incentives and improving childcare
2. Promote labor-focused immigration with faster visa processes and better integration
3. Improve work incentives for welfare recipients by reconsidering recent reforms
4. Strengthen work incentives for older workers by linking retirement age to life expectancy after 2031
5. Apply uniform carbon pricing across all sectors to ensure most cost-effective emissions reduction
6. Create reliable framework for energy transition with clear plans for renewable expansion
7. Eliminate climate-damaging subsidies that counteract carbon pricing
8. Further integrate European energy markets to better balance supply and demand
9. Reduce bureaucracy by systematically reviewing regulations and streamlining reporting requirements
10. Facilitate business formation through one-stop shops and completing the EU single market
11. Reduce corporate tax burden potentially through accelerated depreciation or corporate tax rate cuts
12. Simplify and accelerate administrative processes by setting time limits on decisions

Here is the speech.

This article was written by Adam Button at www.forexlive.com.