Euro zone enjoys rays of economic light 19 Feb 2013 There is still dark news around, for example falling GDP at the end of 2012. But that is the past. A survey shows growth returning to Germany, the currency area’s strongest economy, while a narrowing current account deficit is a sign of adjustment in Greece, one of the weakest.
Hugo Dixon: The Bundesbank isn’t mad 18 Feb 2013 In a world where it is increasingly fashionable to call for central banks to print money, the German central bank is one of the last bastions of orthodoxy. Although its stance is extreme, it is a useful antidote to the theory that easy money is a cost-free cure to economic ills.
Vodafone cable mega-deal would be logical but pricey 13 Feb 2013 Telcos trade at a discount to cable, so Vodafone investors may balk. But the UK mobile group has reasons to eye Germany’s Kabel Deutschland. Households are ready to buy landlines, mobile, TV and Internet together. Vodafone could afford a 10 bln euro deal. And real savings exist.
ThyssenKrupp’s turnaround faces headwinds 12 Feb 2013 The German group’s new management is trying hard to shed its legacy of ill-fated investments, a dysfunctional culture and corporate scandals. Its turnaround is on track, but far from finished. And the bleak economy doesn’t help.
German banking game riskier with go to jail card 11 Feb 2013 Negligent bankers could end up behind bars in Germany if a proposed bill passes. It is motivated by the current electoral climate and raises legal issues. However, the threat of imprisonment might be an effective deterrent to limit reckless behaviour in the financial industry.
Daimler should shelve simplistic size ambitions 7 Feb 2013 The Mercedes brand owner wants to overtake BMW and Audi as the world’s premium carmaker. While the company must avoid dropping further behind, it is silly to want simply to be the biggest. It threatens profitability, and 2012 financial results show that is already a problem.
German corporate pay cap rules fall short 7 Feb 2013 A government-appointed commission wants companies to set relative ceilings for managerial pay and disclose details of their salary structure. If implemented, the reform will bring more transparency. This should limit, but not eliminate, excesses.
Corporate governance: EADS 1 – France 0 6 Feb 2013 The French government couldn’t appoint its preferred candidate, Anne Lauvergeon, to the Airbus maker’s top spot. Instead, former Thales CEO Denis Ranque will get the job. EADS reformed governance after its failed merger with BAE. The new system seems to be working.
Commerzbank write-off highlights low-profit future 4 Feb 2013 The German lender has announced a 560 million euro writedown on deferred tax accruals. It won’t earn enough profit to offset past losses. It’s yet another sign of the industry’s declining profitability, and strengthens the case for a major restructuring of Commerzbank’s business.
LEG is a bet on German property, good and bad 1 Feb 2013 Today’s flotation of LEG is the first big German IPO of 2013. While the German residential landlord won’t be cheap, investors are keen on the business. LEG’s long-term outlook is muddier, though. One-third of the portfolio’s apartments are in poor and declining areas.
More Europe can mean less bureaucracy for the UK 31 Jan 2013 In his big speech on Europe, the UK’s prime minister said unnecessary regulation was stifling British competitiveness. But would-be isolationists ignore the reality that separation also raises impediments to growth. Take the much-maligned Schengen border accord, for example.
Deutsche Bank yet to convince with its renewal 31 Jan 2013 Germany’s biggest bank has boosted capital by refining risk models rather than raising equity. It’s an unusually aggressive approach, and comes alongside a large restructuring. But “New” Deutsche is far from fully formed. Litigation, operational and regulatory risks weigh.
Europe burns down Liikanen’s bank ring-fence 30 Jan 2013 Germany will make its banks split off proprietary trading. But, like France, it has ignored the proposal of the Bank of Finland’s governor to ring-fence other types of client-driven activity. That gives European banks a leg-up, but taxpayers remain exposed to major trading goofs.
Protectionism won’t end rainy days for SolarWorld 30 Jan 2013 The German photovoltaic product maker is fighting for its life. The company has shunned radical restructuring and is instead campaigning for anti-dumping duties against Chinese competitors. Protectionism, however, would do it more harm than good.
Siemens needs corporate governance overhaul 22 Jan 2013 Shareholders of the German group will give short shrift to corporate principles when they re-elect Gerhard Cromme as chairman. Rules had to be changed to allow the man who also chairs ThyssenKrupp to run again. But Siemens badly needs fresh faces to cope with its many challenges.
Merkel will cope with regional election defeat 21 Jan 2013 The German Chancellor’s CDU party has lost an important regional vote. This gives her challengers a psychological boost, but shouldn’t prevent her from winning next fall’s national ballot. And she will be relieved to see that anti-euro parties aren’t gaining ground in Germany.
Gold move shows Buba can cave in to pressure 16 Jan 2013 Germany’s central bank will repatriate some of its gold reserves. That could mean that the institution famous for its indifference to outside criticism does listen to the wider world at times. It would be nice if it showed the same humility on more important matters as well.
Dismal Q4 won’t derail German economy 15 Jan 2013 Europe’s largest economy fared worse than expected at the end of 2012. But the fourth-quarter contraction will be a quickly-forgotten brief dip. Forward-looking indicators suggest that the euro zone’s economic engine is still humming.
German real estate upswing is not for everyone 15 Jan 2013 After years of stagnation, the German residential property market is showing signs of life. Rents and prices are on the rise. Listed landlords are outperforming the stock market and IPOs are in the pipeline. But investors should not get carried away. This market has major pitfalls.
Trade drives Germany and the world on 14 Jan 2013 The latest German export figures are a disappointment, with sales to the euro zone sharply down. But sales to emerging markets have quintupled in the past decade and will continue to power the German economy - and make the global one more balanced and healthier.