18 February 2025 – The German parliamentary election campaign is entering the final spurt and it seems that a few campaign promises for small and medium-sized enterprises (SME) are finally being made – the CO2 tax CBAM in particular could be significantly simplified. DAX with a strong start to the year and a positive outlook. Japan’s economy is growing faster than expected.
DAX with a strong start to the year and a positive outlook
The DAX is continuing its impressive rally and has risen by over 14 per cent since the start of the year – a peak value by international standards. Despite higher valuations, the momentum remains intact, as the earnings outlook in industry, insurance and software has continued to improve.
Analysts expect the DAX to see earnings growth of over 12 per cent in 2026 and more than 11 per cent in the following year. These strong prospects continue to make the index attractive, especially in comparison to other leading European indices, which are currently unable to offer similar growth.
Japan’s economy growing faster than expected
Japan’s economy surprised positively in the fourth quarter with growth of 0.7 per cent – more than twice as strong as forecast. Corporate investment, higher government spending and exports fuelled the growth. Private consumption also continued to rise. The yield on ten-year government bonds reached its highest level in 15 years, a sign of a robust economy.
The Bank of Japan sees stable momentum from rising wages, domestic demand and investments. If wage negotiations once again result in strong growth, gradual increases in key interest rates are possible – which could further strengthen the yen.
Germany: Election campaign promises for SMEs are getting louder
The EU CO2 border adjustment tax CBAM has caused a lot of controversy in recent months. Small and medium-sized companies in Germany and throughout the EU in particular perceive the CBAM measure as too bureaucratic and too expensive, but especially as anti-competitive.
EU Council with core recommendation on CBAM
At the beginning of February, when Poland took over the Presidency of the Council of the European Union, the revision and simplification of CBAM was named as one of the core recommendations of the EU Council.
‘Strengthening EU competitiveness – concerns were raised about uneven regulatory burdens, the need to revise the CBAM mechanism, and support for small and medium-sized enterprises (SMEs).’
Turning election promises into action
According to media reports, this topic has now also reached the German parliamentary election campaign and the first election campaign promises for small and medium-sized enterprises in this direction are being made. These range from a significant reduction in the bureaucracy of CBAM to the demand to completely abolish the CO2 tax and the European Green Deal
It will be important for the new German government yet to be elected to not just make hollow campaign promises regarding CBAM and SMEs, but to actually implement measures and reduce bureaucracy.
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