sueddeutsche.de Betreuungsgeld Von der Leyen soll eingeknickt sein - Deutschland
Kehrtwende im Familienministerium: Das von der CSU geforderte Betreuungsgeld für häusliche Erziehung beurteilte Ministerin von der Leyen bislang als "bildungspolitische Katastrophe" - nun soll sie es trotzdem in ihren Gesetzentwurf aufgenommen haben.
Wednesday, October 31, 2007
Sunday, October 28, 2007
FT.com / Columnists / Wolfgang Munchau - Germany is homing in on better times
FT.com / Columnists / Wolfgang Munchau - Germany is homing in on better times
Germany is homing in on better times
By Wolfgang Munchau
Published: October 28 2007 20:26 | Last updated: October 28 2007 20:26
When I first came to live in London about 25 years ago, Germany was widely considered a more advanced economy than the UK. In the mid-1990s these perceptions began to reverse. During the course of the next decade, I would expect to see yet another reversal – in favour of Germany.
No, I am not going to leap to a defence of the Rhineland model. I remain sceptical about Germany’s long-term economic performance. The country relies too heavily on manufacturing exports. It lacks a modern service economy and is committed to an antiquated financial sector.
But while Germany has its fair share of structural problems, so does the UK, and these are likely to become evident in the next five years. Perhaps the biggest structural problem of the UK is an over-reliance on personal debt and a built-in tendency towards speculative housing bubbles. Britain has owed much of its 15-year spell of good economic growth to an unprecedented credit and housing binge that has lasted abnormally long. While the economic policy regime has undoubtedly improved since the UK’s exit from the European exchange rate mechanism in 1992, it has been helped greatly by global disinflation since then.
In a note for the Policy Exchange think-tank, Oliver Marc Hartwich, Brian Lipson and Holger Schmieding take a critical look at the UK’s economic performance and conclude that it has been strongly influenced by rising debt, rising property prices and a progressively loose fiscal policy.
From 1992 to 2006 the real growth in UK gross domestic product was 49 per cent, they write, while personal debt, in real terms, rose almost three times faster than real GDP growth. Another important factor was home equity withdrawals, which totalled £256bn in today’s prices between 2001 and 2006, according to their study.
While the UK enjoyed a house price boom on an unprecedented scale, Germany suffered from a decline in real house prices, which started a few years after unification. By the middle of this decade, property prices in Germany had bottomed out and begun slowly to rise again. Compared with most capital cities in the western world, Berlin has almost unbelievably low house prices. For the price of one house in London, you get about five in Berlin.
While German prices have started to rise again, UK prices have begun to fall in some regions. I would expect a real decline in UK property prices on a scale similar to the US, where prices are falling fast. All the important UK housing indictors, such as rent-to-value ratios and income multiples, suggest that UK properties are unsustainably overvalued.
As Daniel Gros, director of the Centre for European Policy Studies in Brussels, has reminded us in a recent survey on house price bubbles in Europe, housing cycles are very long – long enough even for rational people to form irrational expectations. The boom was driven by cheap money and abundant credit and it was sustained by an irrational belief that prices would rise for ever in real terms. The downturn is driven by the same process in reverse: expensive money, a credit squeeze and an equally irrational belief about how far prices can drop.
People who lived in the UK during the late 1980s and early 1990s may remember how a period of exuberant optimism quickly turned into economic defeatism. I suspect we may be at a similar junction.
The house price bubble is, of course, not a specific UK problem. There are also bubbles in Spain and Ireland, though both countries have been running persistently strong fiscal surpluses, unlike the UK, and are in a better position to compensate for the coming housing downturn.
An interesting chart produced by Mr Gros shows that, in spite of the lacklustre performance of German property, the housing market in the eurozone as a whole has grown almost as much as US house prices over the last 15 years. Because Germany accounts for about a third of the eurozone economy, this suggests that house price inflation elsewhere in the eurozone must have been extreme. And so it was. The real dividing line is not between the Anglo-Saxon and continental European economies, but right through the eurozone itself.
The reversal of economic fortunes, between Germany on the one side, and the UK, Spain and Ireland on the other, tells us little about the long-term performance of these countries. Germany will still need substantial economic reforms and will not be able to rely solely on its recent competitive improvements. But in the medium term, Germany will benefit from having a housing depression behind it. In the UK, Spain and Ireland, it is only just starting. For the UK in particular, the next few years look pretty grim.
Send your comments to munchau@eurointelligence.com
Germany is homing in on better times
By Wolfgang Munchau
Published: October 28 2007 20:26 | Last updated: October 28 2007 20:26
When I first came to live in London about 25 years ago, Germany was widely considered a more advanced economy than the UK. In the mid-1990s these perceptions began to reverse. During the course of the next decade, I would expect to see yet another reversal – in favour of Germany.
No, I am not going to leap to a defence of the Rhineland model. I remain sceptical about Germany’s long-term economic performance. The country relies too heavily on manufacturing exports. It lacks a modern service economy and is committed to an antiquated financial sector.
But while Germany has its fair share of structural problems, so does the UK, and these are likely to become evident in the next five years. Perhaps the biggest structural problem of the UK is an over-reliance on personal debt and a built-in tendency towards speculative housing bubbles. Britain has owed much of its 15-year spell of good economic growth to an unprecedented credit and housing binge that has lasted abnormally long. While the economic policy regime has undoubtedly improved since the UK’s exit from the European exchange rate mechanism in 1992, it has been helped greatly by global disinflation since then.
In a note for the Policy Exchange think-tank, Oliver Marc Hartwich, Brian Lipson and Holger Schmieding take a critical look at the UK’s economic performance and conclude that it has been strongly influenced by rising debt, rising property prices and a progressively loose fiscal policy.
From 1992 to 2006 the real growth in UK gross domestic product was 49 per cent, they write, while personal debt, in real terms, rose almost three times faster than real GDP growth. Another important factor was home equity withdrawals, which totalled £256bn in today’s prices between 2001 and 2006, according to their study.
While the UK enjoyed a house price boom on an unprecedented scale, Germany suffered from a decline in real house prices, which started a few years after unification. By the middle of this decade, property prices in Germany had bottomed out and begun slowly to rise again. Compared with most capital cities in the western world, Berlin has almost unbelievably low house prices. For the price of one house in London, you get about five in Berlin.
While German prices have started to rise again, UK prices have begun to fall in some regions. I would expect a real decline in UK property prices on a scale similar to the US, where prices are falling fast. All the important UK housing indictors, such as rent-to-value ratios and income multiples, suggest that UK properties are unsustainably overvalued.
As Daniel Gros, director of the Centre for European Policy Studies in Brussels, has reminded us in a recent survey on house price bubbles in Europe, housing cycles are very long – long enough even for rational people to form irrational expectations. The boom was driven by cheap money and abundant credit and it was sustained by an irrational belief that prices would rise for ever in real terms. The downturn is driven by the same process in reverse: expensive money, a credit squeeze and an equally irrational belief about how far prices can drop.
People who lived in the UK during the late 1980s and early 1990s may remember how a period of exuberant optimism quickly turned into economic defeatism. I suspect we may be at a similar junction.
The house price bubble is, of course, not a specific UK problem. There are also bubbles in Spain and Ireland, though both countries have been running persistently strong fiscal surpluses, unlike the UK, and are in a better position to compensate for the coming housing downturn.
An interesting chart produced by Mr Gros shows that, in spite of the lacklustre performance of German property, the housing market in the eurozone as a whole has grown almost as much as US house prices over the last 15 years. Because Germany accounts for about a third of the eurozone economy, this suggests that house price inflation elsewhere in the eurozone must have been extreme. And so it was. The real dividing line is not between the Anglo-Saxon and continental European economies, but right through the eurozone itself.
The reversal of economic fortunes, between Germany on the one side, and the UK, Spain and Ireland on the other, tells us little about the long-term performance of these countries. Germany will still need substantial economic reforms and will not be able to rely solely on its recent competitive improvements. But in the medium term, Germany will benefit from having a housing depression behind it. In the UK, Spain and Ireland, it is only just starting. For the UK in particular, the next few years look pretty grim.
Send your comments to munchau@eurointelligence.com
Saturday, October 27, 2007
sueddeutsche.de Literatur Schriftsteller Martin Mosebach erhält Büchner-Preis - Kultur
sueddeutsche.de Literatur Schriftsteller Martin Mosebach erhält Büchner-Preis - Kultur
Der Frankfurter Schriftsteller Martin Mosebach ist mit dem Georg-Büchner-Preis ausgezeichnet worden, der als der bedeutendste deutsche Literaturpreis gilt. Die Deutsche Akademie für Sprache und Dichtung würdigte Mosebach als "glanzvollen Stilisten".
Der Frankfurter Schriftsteller Martin Mosebach ist mit dem Georg-Büchner-Preis ausgezeichnet worden, der als der bedeutendste deutsche Literaturpreis gilt. Die Deutsche Akademie für Sprache und Dichtung würdigte Mosebach als "glanzvollen Stilisten".
sueddeutsche.de Nicola Leibinger-Kammüller ''Die Firma sitzt ständig mit am Familientisch'' - Wirtschaft
sueddeutsche.de Nicola Leibinger-Kammüller ''Die Firma sitzt ständig mit am Familientisch'' - Wirtschaft
Nicola Leibinger-Kammüller, Chefin des Maschinenbau-Unternehmens Trumpf, über den Generationswechsel, den Kodex der Familie und die Lehren von Erich Kästner.
Nicola Leibinger-Kammüller, Chefin des Maschinenbau-Unternehmens Trumpf, über den Generationswechsel, den Kodex der Familie und die Lehren von Erich Kästner.
sueddeutsche.de Kanzlerin kritisiert Wirtschaft Merkel will mehr Top-Managerinnen - Deutschland
sueddeutsche.de Kanzlerin kritisiert Wirtschaft Merkel will mehr Top-Managerinnen - Deutschland
Die deutsche Wirtschaft muss nach Ansicht von Bundeskanzlerin Angela Merkel mehr Frauen in Führungspositionen bringen. Auf dem Bundesdelegiertentag der Frauen-Union forderte die Kanzlerin mit Nachdruck mehr Möglichkeiten für junge Frauen.
Die deutsche Wirtschaft muss nach Ansicht von Bundeskanzlerin Angela Merkel mehr Frauen in Führungspositionen bringen. Auf dem Bundesdelegiertentag der Frauen-Union forderte die Kanzlerin mit Nachdruck mehr Möglichkeiten für junge Frauen.
sueddeutsche.de Kurswechsel der SPD Bebel! Brandt! Beck. - Deutschland
sueddeutsche.de Kurswechsel der SPD Bebel! Brandt! Beck. - Deutschland
Aus Furcht vor dem drohenden Parteisterben hat SPD-Parteichef Beck sich für einen Kurswechsel entschieden, der Risiken birgt. Trotzdem darf eine SPD, die sich um eine neue Sozialpolitik müht, stolz sein.
Aus Furcht vor dem drohenden Parteisterben hat SPD-Parteichef Beck sich für einen Kurswechsel entschieden, der Risiken birgt. Trotzdem darf eine SPD, die sich um eine neue Sozialpolitik müht, stolz sein.
Friday, October 26, 2007
sueddeutsche.de Vor dem SPD-Parteitag Die Kunst des Chamäleons - Deutschland
sueddeutsche.de Vor dem SPD-Parteitag Die Kunst des Chamäleons - Deutschland
Während der Streit mit Vizekanzler Müntefering die öffentliche Debatte dominiert, hat Parteichef Beck hinter den Kulissen fast unbemerkt eine Korrektur des SPD-Grundsatzprogramms erreicht: Die Sozialdemokraten sollen wieder sozialer sein.
Während der Streit mit Vizekanzler Müntefering die öffentliche Debatte dominiert, hat Parteichef Beck hinter den Kulissen fast unbemerkt eine Korrektur des SPD-Grundsatzprogramms erreicht: Die Sozialdemokraten sollen wieder sozialer sein.
Kommentar zum SPD-Parteitag: Vorwärts Genossen, es geht zurück! - Politik - SPIEGEL ONLINE - Nachrichten
Kommentar zum SPD-Parteitag: Vorwärts Genossen, es geht zurück! - Politik - SPIEGEL ONLINE - Nachrichten
Die SPD wird auf ihrem Hamburger Parteitag die Agenda 2010 zurückdrehen. Vielleicht kann sie damit sogar politisch Boden gut machen. Kurt Becks Rolle Rückwärts ist dennoch keine linke Antwort auf die Probleme in Deutschland.
Die SPD wird auf ihrem Hamburger Parteitag die Agenda 2010 zurückdrehen. Vielleicht kann sie damit sogar politisch Boden gut machen. Kurt Becks Rolle Rückwärts ist dennoch keine linke Antwort auf die Probleme in Deutschland.
SPD-Parteitag: Boss Beck menschelt wieder - Politik - SPIEGEL ONLINE - Nachrichten
SPD-Parteitag: Boss Beck menschelt wieder - Politik - SPIEGEL ONLINE - Nachrichten
Standing Ovations, Blumen, Jubel - mit übergroßer Mehrheit wurde Kurt Beck als SPD-Chef wiedergewählt. Doch auch nach dem Triumph im parteiinternen Machtkampf mit Vizekanzler Müntefering bleiben Zweifel. Seine Rede zur Zukunft der SPD enttäuschte, der Kurs bleibt unklar.
Standing Ovations, Blumen, Jubel - mit übergroßer Mehrheit wurde Kurt Beck als SPD-Chef wiedergewählt. Doch auch nach dem Triumph im parteiinternen Machtkampf mit Vizekanzler Müntefering bleiben Zweifel. Seine Rede zur Zukunft der SPD enttäuschte, der Kurs bleibt unklar.
Bund - Politik - FAZ.NET - Wiedergewählt mit 95,5 Prozent: SPD schart sich um Beck
Bund - Politik - FAZ.NET - Wiedergewählt mit 95,5 Prozent: SPD schart sich um Beck
26. Oktober 2007 Der SPD-Bundesparteitag in Hamburg hat am Freitag Kurt Beck mit großer Mehrheit als Vorsitzenden wiedergewählt. Der rheinland-pfälzische Ministerpräsident erhielt 483 von 506 gültigen Stimmen. Es gab 6 Enthaltungen, 17 votierten gegen ihn. Das entspricht einer Zustimmung von 95,5 Prozent.
26. Oktober 2007 Der SPD-Bundesparteitag in Hamburg hat am Freitag Kurt Beck mit großer Mehrheit als Vorsitzenden wiedergewählt. Der rheinland-pfälzische Ministerpräsident erhielt 483 von 506 gültigen Stimmen. Es gab 6 Enthaltungen, 17 votierten gegen ihn. Das entspricht einer Zustimmung von 95,5 Prozent.
sueddeutsche.de SPD-Parteitag Standing Ovations für Altkanzler Schröder - Deutschland
sueddeutsche.de SPD-Parteitag Standing Ovations für Altkanzler Schröder - Deutschland
Mit Grußworten des Hamburger Spitzenkandidaten Naumann und von Altkanzler Schröder hat der dreitägige SPD-Bundesparteitag in Hamburg begonnen. Die Partei scheint mit ihrem alten Chef versöhnt.
Mit Grußworten des Hamburger Spitzenkandidaten Naumann und von Altkanzler Schröder hat der dreitägige SPD-Bundesparteitag in Hamburg begonnen. Die Partei scheint mit ihrem alten Chef versöhnt.
Wednesday, October 24, 2007
sueddeutsche.de SPD-Streit zum Arbeitslosengeld I Müntefering zweifelt an Finanzierbarkeit - Deutschland
sueddeutsche.de SPD-Streit zum Arbeitslosengeld I Müntefering zweifelt an Finanzierbarkeit - Deutschland
Wenige Tage vor dem SPD-Parteitag gehen die Diskussionen um Veränderungen an der Agenda 2010 weiter. Vizekanzler Müntefering knüpft die Umsetzung eines verlängerten Arbeitslosengeldes I an die Finanzierbarkeit - die Hessen-SPD stellt derweil bereits weitere Forderungen auf.
Wenige Tage vor dem SPD-Parteitag gehen die Diskussionen um Veränderungen an der Agenda 2010 weiter. Vizekanzler Müntefering knüpft die Umsetzung eines verlängerten Arbeitslosengeldes I an die Finanzierbarkeit - die Hessen-SPD stellt derweil bereits weitere Forderungen auf.
sueddeutsche.de Tokio Hotel Mehr als ein Phänomen - Leben & Stil
sueddeutsche.de Tokio Hotel Mehr als ein Phänomen - Leben & Stil
Französische Kinder lernen die deutsche Sprache, um die Texte verstehen zu können, die Band wird für zwei Awards bei dem MTV-Awards nominiert. Tokio Hotel hat sich etabliert - zu Recht.
Französische Kinder lernen die deutsche Sprache, um die Texte verstehen zu können, die Band wird für zwei Awards bei dem MTV-Awards nominiert. Tokio Hotel hat sich etabliert - zu Recht.
Tuesday, October 23, 2007
Monday, October 22, 2007
FTD.de - Deutschland - Nachrichten - Beck erklärt ALG-I-Streit für beendet
FTD.de - Deutschland - Nachrichten - Beck erklärt ALG-I-Streit für beendet
Der SPD-Vorstand hat sich im Streit über das Arbeitslosengeld I mit großer Mehrheit hinter Parteichef Kurt Beck gestellt. Geht es nach Beck, ist die wochenlange parteiinterne Diskussion damit beendet. Aber die Auseinandersetzung mit dem Koalitionspartner steht noch bevor.
Der SPD-Vorstand hat sich im Streit über das Arbeitslosengeld I mit großer Mehrheit hinter Parteichef Kurt Beck gestellt. Geht es nach Beck, ist die wochenlange parteiinterne Diskussion damit beendet. Aber die Auseinandersetzung mit dem Koalitionspartner steht noch bevor.
Friday, October 19, 2007
Gespräch mit Andrea Nahles ''Das ist ein bisschen wie Almauftrieb'' - Deutschland - sueddeutsche.de
Gespräch mit Andrea Nahles ''Das ist ein bisschen wie Almauftrieb'' - Deutschland - sueddeutsche.de
Andrea Nahles, designierte SPD-Vizechefin, über das Gute und das Schlechte an der Agenda 2010, die neue Macht von Kurt Beck, Aufschwung für alle, den Parteitag und Schulspeisungen.
Andrea Nahles, designierte SPD-Vizechefin, über das Gute und das Schlechte an der Agenda 2010, die neue Macht von Kurt Beck, Aufschwung für alle, den Parteitag und Schulspeisungen.
Lissabon EU-Reformvertrag steht - Ausland - sueddeutsche.de
Lissabon EU-Reformvertrag steht - Ausland - sueddeutsche.de
19.10.2007
Lissabon
EU-Reformvertrag steht
Der EU-Reformvertrag steht: Nach sechs Jahren des Ringens haben sich die Staats- und Regierungschefs der Europäischen Union in der Nacht zum Freitag auf einen Vertragstext verständigt. Bundeskanzlerin Angela Merkel bezeichnete die Einigung, die beim Gipfel in Lissabon erzielt wurde, als "großen Erfolg".
19.10.2007
Lissabon
EU-Reformvertrag steht
Der EU-Reformvertrag steht: Nach sechs Jahren des Ringens haben sich die Staats- und Regierungschefs der Europäischen Union in der Nacht zum Freitag auf einen Vertragstext verständigt. Bundeskanzlerin Angela Merkel bezeichnete die Einigung, die beim Gipfel in Lissabon erzielt wurde, als "großen Erfolg".
Thursday, October 18, 2007
Business in Germany | Locusts in lederhosen | Economist.com
Business in Germany | Locusts in lederhosen | Economist.com
Locusts in lederhosen
Oct 18th 2007 | FRANKFURT
From The Economist print edition
German bosses are learning from private equity
TWO years ago Germany was gripped by a fierce debate over whether aggressive private-equity investors—dubbed “locusts” by a politician—were good or bad for the country. An activist fund from London blocked Deutsche Börse's bid for the London Stock Exchange and caused the departure of its chief executive, Werner Seifert, and its chairman. Mr Seifert wrote a vitriolic book, “Invasion of the Locusts”, catching the mood of the time. Since then, however, German bosses have learned from the locusts. They are making their own raids and using private-equity techniques to ginger up German companies.
Next week the European Court of Justice is expected to order the German government to abolish the Volkswagen law of 1960. This limits the voting rights of any single VW shareholder to 20%, protecting Germany's biggest carmaker from being taken over. Lifting this cap will allow Porsche, which already owns 31% of the shares, to win control.
Wendelin Wiedeking, chief executive of Porsche, began building a stake in VW two years ago. He plans to put the two carmakers under the same holding company, called Porsche Automobil Holding. In doing so, he would dilute the power of VW's workforce. Co-determination, the practice of giving workers a big say in the management of German firms, is probably the oddest feature of the country for foreign investors. Only three members of the merged company's 12-strong supervisory board would represent VW workers, compared with ten out of 20 at VW now.
Mr Wiedeking's strategy is the most obviously locust-like among German executives, but there are other examples. Eckhard Cordes, a former executive at DaimlerChrysler, a car firm, is riding roughshod into Metro, a retail group. He has the backing of the company's biggest shareholders—and these are not scary private-equity firms but two wealthy German families. Thomas Middelhoff, chief executive of Arcandor, another retailer, executed a private-equityish restructuring two years ago, loading the firm with debt then flogging assets to pay it off. Now he is in the mood to buy bits of other retail companies. Last year Manfred Wennemer, chief executive of Continental, a car-parts supplier, successfully repelled some potential private-equity buyers but seems to have learned a thing or two from them. This year his firm took on a pile of debt to buy Siemens VDO, an auto-electronics firm, for €11.4 billion ($16.2 billion).
More change is on its way. Nine of the 30 biggest listed German companies which make up the DAX stockmarket index have recently changed their chief executive or will do so soon. The new bosses are expected to shake things up. At Siemens, a giant engineering company, Peter Löscher will streamline the conglomerate's nine divisions into three. At BMW, Norbert Reithofer is expected to start a new brand of car to add to the group's BMWs, Minis and Rolls-Royces. At RWE, a power company, Jürgen Grossmann is likely to make use of the acquisition expertise he gained buying a division of Klöckner, a steelmaker, in 1993.
A new corporate structure, the Societas Europaea (SE), which has been adopted by Porsche Automobil Holding, could help German companies break further away from co-determination. Big firms must now have not only a management board but also a supervisory board of 20 members, half of them workers' representatives. Changing to SE status allows firms to negotiate a cut in workers' representation or even to do away with a supervisory board altogether. Allianz, a big insurer, was the first big company to move to the new structure, followed by Fresenius Medical Care. BASF, a chemicals company, plans to make the change next year.
In two years the names in the DAX could look very different, and not just because the initials AG (for Aktiengesellschaft) are replaced by SE. A big sell-out to foreign locusts is far less likely now, because German companies have learned to do the job themselves.
Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.
Locusts in lederhosen
Oct 18th 2007 | FRANKFURT
From The Economist print edition
German bosses are learning from private equity
TWO years ago Germany was gripped by a fierce debate over whether aggressive private-equity investors—dubbed “locusts” by a politician—were good or bad for the country. An activist fund from London blocked Deutsche Börse's bid for the London Stock Exchange and caused the departure of its chief executive, Werner Seifert, and its chairman. Mr Seifert wrote a vitriolic book, “Invasion of the Locusts”, catching the mood of the time. Since then, however, German bosses have learned from the locusts. They are making their own raids and using private-equity techniques to ginger up German companies.
Next week the European Court of Justice is expected to order the German government to abolish the Volkswagen law of 1960. This limits the voting rights of any single VW shareholder to 20%, protecting Germany's biggest carmaker from being taken over. Lifting this cap will allow Porsche, which already owns 31% of the shares, to win control.
Wendelin Wiedeking, chief executive of Porsche, began building a stake in VW two years ago. He plans to put the two carmakers under the same holding company, called Porsche Automobil Holding. In doing so, he would dilute the power of VW's workforce. Co-determination, the practice of giving workers a big say in the management of German firms, is probably the oddest feature of the country for foreign investors. Only three members of the merged company's 12-strong supervisory board would represent VW workers, compared with ten out of 20 at VW now.
Mr Wiedeking's strategy is the most obviously locust-like among German executives, but there are other examples. Eckhard Cordes, a former executive at DaimlerChrysler, a car firm, is riding roughshod into Metro, a retail group. He has the backing of the company's biggest shareholders—and these are not scary private-equity firms but two wealthy German families. Thomas Middelhoff, chief executive of Arcandor, another retailer, executed a private-equityish restructuring two years ago, loading the firm with debt then flogging assets to pay it off. Now he is in the mood to buy bits of other retail companies. Last year Manfred Wennemer, chief executive of Continental, a car-parts supplier, successfully repelled some potential private-equity buyers but seems to have learned a thing or two from them. This year his firm took on a pile of debt to buy Siemens VDO, an auto-electronics firm, for €11.4 billion ($16.2 billion).
More change is on its way. Nine of the 30 biggest listed German companies which make up the DAX stockmarket index have recently changed their chief executive or will do so soon. The new bosses are expected to shake things up. At Siemens, a giant engineering company, Peter Löscher will streamline the conglomerate's nine divisions into three. At BMW, Norbert Reithofer is expected to start a new brand of car to add to the group's BMWs, Minis and Rolls-Royces. At RWE, a power company, Jürgen Grossmann is likely to make use of the acquisition expertise he gained buying a division of Klöckner, a steelmaker, in 1993.
A new corporate structure, the Societas Europaea (SE), which has been adopted by Porsche Automobil Holding, could help German companies break further away from co-determination. Big firms must now have not only a management board but also a supervisory board of 20 members, half of them workers' representatives. Changing to SE status allows firms to negotiate a cut in workers' representation or even to do away with a supervisory board altogether. Allianz, a big insurer, was the first big company to move to the new structure, followed by Fresenius Medical Care. BASF, a chemicals company, plans to make the change next year.
In two years the names in the DAX could look very different, and not just because the initials AG (for Aktiengesellschaft) are replaced by SE. A big sell-out to foreign locusts is far less likely now, because German companies have learned to do the job themselves.
Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.
Tuesday, October 16, 2007
DIW: Wirtschaftswachstum bleibt robust | Wirtschaft | Deutsche Welle | 16.10.2007
DIW: Wirtschaftswachstum bleibt robust | Wirtschaft | Deutsche Welle | 16.10.2007
Das Wirtschaftswachstum in Deutschland bleibt Experten zufolge zwar auch in den kommenden beiden Jahren robust, fällt im Vergleich zu 2007 aber etwas ab. Ungewiss sei, wie viel von dem Boom bei Arbeitnehmern ankomme.
Das Wirtschaftswachstum in Deutschland bleibt Experten zufolge zwar auch in den kommenden beiden Jahren robust, fällt im Vergleich zu 2007 aber etwas ab. Ungewiss sei, wie viel von dem Boom bei Arbeitnehmern ankomme.
Saturday, October 13, 2007
The German left | Troubled times | Economist.com
The German left | Troubled times | Economist.com
The German left
Troubled times
Oct 11th 2007 | BERLIN AND DUISBURG
From The Economist print edition
Why the rise of the Left Party has cast the Social Democrats into a gloom
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ASK Ralf Pietras why the Left Party is growing in Duisburg and he offers a ready answer. The coal mines are exhausted, steel is forged by machine and old folk scavenge for bottles to reclaim the deposits. Duisburg, a gritty town at the junction of the Rhine and the Ruhr, has lost 35,000 good jobs in 15 years. In such adversity, the Left Party thrives. Its local membership has quintupled since it began in 2005, to 330. Mr Pietras, spokesman of the Duisburg branch, dreams of 1,000. The local Social Democratic Party (SPD), which ruled the city for 56 years until 2004, has lost half its membership in two decades.
Frighteningly for the SPD, this is a national trend. It has been governing in Berlin, from 1998 to 2005 under Chancellor Gerhard Schröder, since then as the junior partner in Angela Merkel's “grand coalition”. But as the Left Party gnaws away at its working-class base, the SPD is starting to panic. The clearest sign is a call by the SPD's boss, Kurt Beck, to extend the period for paying unemployment benefit to older workers. Franz Müntefering, the SPD vice-chancellor under Ms Merkel, has denounced the idea as a “U-turn” from reforms enacted by the Schröder government. The press is speculating that his resignation may be imminent. Mr Beck threatens the foundations of the grand coalition, the Christian Democrats claim.
Why is a small party founded by east German former communists causing national ructions? One reason is that the economic upswing has left so many Germans behind. Unemployment is at its lowest level since the early 1990s, thanks partly to the reforms that Mr Beck now wants to roll back. But many of the new jobs offer lower pay and less security than those lost during the downturn, notes Markus Grabka of DIW, a research institute in Berlin. Relative poverty has jumped, with 17% of Germans earning less than 60% of the median in 2005, up from 12% in 1999. Income-tax cuts have helped the rich; the middle class has shrunk.
On these matters the Left Party is saying what most Germans seem to be thinking. According to one recent poll, 82% of Germans want to lower the retirement age from 67 (reversing another reform), two-thirds want a minimum wage and 72% think the grand coalition should do more to promote social justice. Half want German troops out of Afghanistan, but the Left Party is the only one that unqualifiedly agrees. Unlike the Greens and the Free Democrats, it has no reason to flirt with either party in the grand coalition (the SPD refuses to consider it as a potential partner at federal level). It likes to claim it is Germany's only real opposition party.
This has come about mostly by luck. The Left Party is the third incarnation of East Germany's Socialist Unity Party, which had 2.3m members when the regime collapsed in 1989. It struggled back to life as the Party of Democratic Socialism, trying to be a normal party by catering to Ossis who felt swamped by unification. The Left Party is still strongest in the east: it wins almost a quarter of votes in the six eastern states, has been in a coalition in Mecklenburg-West Pomerania and is now the SPD's partner in the city of Berlin.
It was a bust-up within the SPD that gave the Left Party its purchase in the west. Social Democrats dismayed by Mr Schröder's reforms broke away to form Alternative Labour and Social Justice (WASG), which fought alongside the PDS in the 2005 election. Between them they took almost 9% of the vote. They formally merged into the Left Party in June.
This hybrid works mainly because there is no risk of its assuming national responsibilities anytime soon. It has two leaders: Lothar Bisky, a film-studies professor from Brandenburg (though Gregor Gysi is the party's true eastern star), and Oskar Lafontaine, a firebrand from Saarland given to populist rhetoric, who was once SPD chairman. The SPD loathes Mr Lafontaine for abruptly quitting as Mr Schröder's finance minister in 1999. It has just published “Oskar's World”, a supposedly incriminating compendium of remarks by and about him.
The Left Party's policy documents drip with hostility to capitalism. It leans toward pacifism in foreign policy and against the hawkish European Central Bank. The long-term goal, says Dietmar Bartsch, its general secretary, is “another society” to be achieved by “evolution, not revolution”. Higher taxes and lower defence spending would bring greater equality.
The party's eastern wing has communist remnants (and a libertarian strain, exemplified by Saxony's Julia Bonk, who favours a “right to get high”). But its leaders have been sobered by proximity to power. In the city of Berlin, the Left Party has abetted austerity measures such as pay cuts for public workers that would be deemed heresy in parts of the SPD. Such decisions show that “we are not merely a fair-weather party,” says Harald Wolf, Berlin's economy minister.
Pragmatism is less evident in the former WASG, which is dominated by the politics of protest. Though less inclined to call themselves socialists, the westerners care less about fiscal responsibility. Lacking experience in power, they are unwilling to get it by compromise. André Brie, an eastern moderniser, recently warned westerners (and some easterners) against “black and white thinking” reminiscent of communist times. The Left Party's democratic credentials are often questioned, but Dan Hough says in a new book* that its leaders are all democrats. The main obstacles to co-operation with the SPD in the west are Mr Lafontaine and the stigma of the party's communist past.
The Left Party's short-term aims are thus modest. In most western states its vote is close to the 5% level needed to get into the legislature. It has already cracked Bremen's and could enter up to three more next year. Even in fertile Duisburg, the SPD's shrunken membership still dwarfs that of the Left Party and it dominates the local media, complains Mr Pietras. Hence the immediate ambition, says Mr Bartsch, “to shift the axis of politics to the left.”
The SPD's troubles suggest this may be happening. That does not guarantee the Left Party a bright future. It could be hurt by a more populist SPD, by greater prosperity (incomes have picked up during the revival of the past two years) or by its own internal contradictions. But it could also evolve into a permanent candidate for coalition with the SPD (and perhaps the Greens), including at federal level. The risk then would be of losing what makes it distinctive. But the SPD's panic may not truly subside until the Left Party becomes a potential partner, not a competitor.
* “The Left Party in Contemporary German Politics”, by Dan Hough, Michael Koss and Jonathan Olsen. Palgrave Macmillan, $74.95 and £50
The German left
Troubled times
Oct 11th 2007 | BERLIN AND DUISBURG
From The Economist print edition
Why the rise of the Left Party has cast the Social Democrats into a gloom
Get article background
ASK Ralf Pietras why the Left Party is growing in Duisburg and he offers a ready answer. The coal mines are exhausted, steel is forged by machine and old folk scavenge for bottles to reclaim the deposits. Duisburg, a gritty town at the junction of the Rhine and the Ruhr, has lost 35,000 good jobs in 15 years. In such adversity, the Left Party thrives. Its local membership has quintupled since it began in 2005, to 330. Mr Pietras, spokesman of the Duisburg branch, dreams of 1,000. The local Social Democratic Party (SPD), which ruled the city for 56 years until 2004, has lost half its membership in two decades.
Frighteningly for the SPD, this is a national trend. It has been governing in Berlin, from 1998 to 2005 under Chancellor Gerhard Schröder, since then as the junior partner in Angela Merkel's “grand coalition”. But as the Left Party gnaws away at its working-class base, the SPD is starting to panic. The clearest sign is a call by the SPD's boss, Kurt Beck, to extend the period for paying unemployment benefit to older workers. Franz Müntefering, the SPD vice-chancellor under Ms Merkel, has denounced the idea as a “U-turn” from reforms enacted by the Schröder government. The press is speculating that his resignation may be imminent. Mr Beck threatens the foundations of the grand coalition, the Christian Democrats claim.
Why is a small party founded by east German former communists causing national ructions? One reason is that the economic upswing has left so many Germans behind. Unemployment is at its lowest level since the early 1990s, thanks partly to the reforms that Mr Beck now wants to roll back. But many of the new jobs offer lower pay and less security than those lost during the downturn, notes Markus Grabka of DIW, a research institute in Berlin. Relative poverty has jumped, with 17% of Germans earning less than 60% of the median in 2005, up from 12% in 1999. Income-tax cuts have helped the rich; the middle class has shrunk.
On these matters the Left Party is saying what most Germans seem to be thinking. According to one recent poll, 82% of Germans want to lower the retirement age from 67 (reversing another reform), two-thirds want a minimum wage and 72% think the grand coalition should do more to promote social justice. Half want German troops out of Afghanistan, but the Left Party is the only one that unqualifiedly agrees. Unlike the Greens and the Free Democrats, it has no reason to flirt with either party in the grand coalition (the SPD refuses to consider it as a potential partner at federal level). It likes to claim it is Germany's only real opposition party.
This has come about mostly by luck. The Left Party is the third incarnation of East Germany's Socialist Unity Party, which had 2.3m members when the regime collapsed in 1989. It struggled back to life as the Party of Democratic Socialism, trying to be a normal party by catering to Ossis who felt swamped by unification. The Left Party is still strongest in the east: it wins almost a quarter of votes in the six eastern states, has been in a coalition in Mecklenburg-West Pomerania and is now the SPD's partner in the city of Berlin.
It was a bust-up within the SPD that gave the Left Party its purchase in the west. Social Democrats dismayed by Mr Schröder's reforms broke away to form Alternative Labour and Social Justice (WASG), which fought alongside the PDS in the 2005 election. Between them they took almost 9% of the vote. They formally merged into the Left Party in June.
This hybrid works mainly because there is no risk of its assuming national responsibilities anytime soon. It has two leaders: Lothar Bisky, a film-studies professor from Brandenburg (though Gregor Gysi is the party's true eastern star), and Oskar Lafontaine, a firebrand from Saarland given to populist rhetoric, who was once SPD chairman. The SPD loathes Mr Lafontaine for abruptly quitting as Mr Schröder's finance minister in 1999. It has just published “Oskar's World”, a supposedly incriminating compendium of remarks by and about him.
The Left Party's policy documents drip with hostility to capitalism. It leans toward pacifism in foreign policy and against the hawkish European Central Bank. The long-term goal, says Dietmar Bartsch, its general secretary, is “another society” to be achieved by “evolution, not revolution”. Higher taxes and lower defence spending would bring greater equality.
The party's eastern wing has communist remnants (and a libertarian strain, exemplified by Saxony's Julia Bonk, who favours a “right to get high”). But its leaders have been sobered by proximity to power. In the city of Berlin, the Left Party has abetted austerity measures such as pay cuts for public workers that would be deemed heresy in parts of the SPD. Such decisions show that “we are not merely a fair-weather party,” says Harald Wolf, Berlin's economy minister.
Pragmatism is less evident in the former WASG, which is dominated by the politics of protest. Though less inclined to call themselves socialists, the westerners care less about fiscal responsibility. Lacking experience in power, they are unwilling to get it by compromise. André Brie, an eastern moderniser, recently warned westerners (and some easterners) against “black and white thinking” reminiscent of communist times. The Left Party's democratic credentials are often questioned, but Dan Hough says in a new book* that its leaders are all democrats. The main obstacles to co-operation with the SPD in the west are Mr Lafontaine and the stigma of the party's communist past.
The Left Party's short-term aims are thus modest. In most western states its vote is close to the 5% level needed to get into the legislature. It has already cracked Bremen's and could enter up to three more next year. Even in fertile Duisburg, the SPD's shrunken membership still dwarfs that of the Left Party and it dominates the local media, complains Mr Pietras. Hence the immediate ambition, says Mr Bartsch, “to shift the axis of politics to the left.”
The SPD's troubles suggest this may be happening. That does not guarantee the Left Party a bright future. It could be hurt by a more populist SPD, by greater prosperity (incomes have picked up during the revival of the past two years) or by its own internal contradictions. But it could also evolve into a permanent candidate for coalition with the SPD (and perhaps the Greens), including at federal level. The risk then would be of losing what makes it distinctive. But the SPD's panic may not truly subside until the Left Party becomes a potential partner, not a competitor.
* “The Left Party in Contemporary German Politics”, by Dan Hough, Michael Koss and Jonathan Olsen. Palgrave Macmillan, $74.95 and £50
Thursday, October 11, 2007
Sunday, October 07, 2007
Projekt Gutenberg-DE - Kultur - SPIEGEL ONLINE - Nachrichten
Projekt Gutenberg-DE - Kultur - SPIEGEL ONLINE - Nachrichten
Kurt Tucholsky
Kurzer Abriß der Nationalökonomie
Nationalökonomie ist, wenn die Leute sich wundern, warum sie kein Geld haben. Das hat mehrere Gründe, die feinsten sind die wissenschaftlichen Gründe, doch können solche durch Notverordnungen aufgehoben werden. Über die ältere Nationalökonomie kann man ja nur lachen und dürfen wir selbe daher mit Stillschweigen übergehn. Sie regierte von 715 vor Christo bis zum Jahre 1 nach Marx. Seitdem ist die Frage völlig gelöst: die Leute haben zwar immer noch kein Geld, wissen aber wenigstens, warum.
Kurt Tucholsky
Kurzer Abriß der Nationalökonomie
Nationalökonomie ist, wenn die Leute sich wundern, warum sie kein Geld haben. Das hat mehrere Gründe, die feinsten sind die wissenschaftlichen Gründe, doch können solche durch Notverordnungen aufgehoben werden. Über die ältere Nationalökonomie kann man ja nur lachen und dürfen wir selbe daher mit Stillschweigen übergehn. Sie regierte von 715 vor Christo bis zum Jahre 1 nach Marx. Seitdem ist die Frage völlig gelöst: die Leute haben zwar immer noch kein Geld, wissen aber wenigstens, warum.
FTD.de - Handel + Dienstleister - Nachrichten - Bahn fährt harten Kurs
FTD.de - Handel + Dienstleister - Nachrichten - Bahn fährt harten Kurs
Der Konflikt zwischen Lokführern spitzt sich weiter zu: Die Bahn lehnt Zugeständnisse im Tarifstreit mit der Gewerkschaft GDL strikt ab. Auch die Bundesregierung will sich raushalten. Nun erwägen die Lokführer, künftig ohne Vorwarnung zu streiken.
Der Konflikt zwischen Lokführern spitzt sich weiter zu: Die Bahn lehnt Zugeständnisse im Tarifstreit mit der Gewerkschaft GDL strikt ab. Auch die Bundesregierung will sich raushalten. Nun erwägen die Lokführer, künftig ohne Vorwarnung zu streiken.
Merkel: "Es war ein sehr bewegender Moment für mich" | Welt | Deutsche Welle | 06.10.2007
Merkel: "Es war ein sehr bewegender Moment für mich" | Welt | Deutsche Welle | 06.10.2007
Bundeskanzlerin Angela Merkel hat sich nach ihrem ersten persönlichen Treffen mit dem ehemaligen südafrikanischen Präsidenten Nelson Mandela in Johannesburg sichtlich bewegt gezeigt.
Bundeskanzlerin Angela Merkel hat sich nach ihrem ersten persönlichen Treffen mit dem ehemaligen südafrikanischen Präsidenten Nelson Mandela in Johannesburg sichtlich bewegt gezeigt.
Saturday, October 06, 2007
Barclays gibt Kampf um ABN AMRO auf | Wirtschaft | Deutsche Welle | 05.10.2007
Barclays gibt Kampf um ABN AMRO auf | Wirtschaft | Deutsche Welle | 05.10.2007
Nach einem langen Übernahmekampf hat die britische Großbank Barclays ihr Angebot für den niederländischen Konkurrenten ABN AMRO zurückgezogen. Damit ist der Weg frei für das Konsortium um die Royal Bank of Scotland.
Nach einem langen Übernahmekampf hat die britische Großbank Barclays ihr Angebot für den niederländischen Konkurrenten ABN AMRO zurückgezogen. Damit ist der Weg frei für das Konsortium um die Royal Bank of Scotland.
Friday, October 05, 2007
Ein Chronist deutscher Geschichte | Buch | Deutsche Welle | 05.10.2007
Ein Chronist deutscher Geschichte | Buch | Deutsche Welle | 05.10.2007
Er war einer der beliebtesten und am stärksten verbreiteten deutschen Gegenwartsautoren: der Schriftsteller Walter Kempowski. Er verstarb im Alter von 78 Jahren.
Er war einer der beliebtesten und am stärksten verbreiteten deutschen Gegenwartsautoren: der Schriftsteller Walter Kempowski. Er verstarb im Alter von 78 Jahren.
Thursday, October 04, 2007
Tarifautonomie: Bahn-Streik versetzt Verkehrspolitiker in Alarmstimmung - Wirtschaft - SPIEGEL ONLINE - Nachrichten
Tarifautonomie: Bahn-Streik versetzt Verkehrspolitiker in Alarmstimmung - Wirtschaft - SPIEGEL ONLINE - Nachrichten
Pendler im Bahn-Chaos, Güterzüge, die ihr Ziel nicht erreichen: Der für Freitag vorgesehene bundesweite Streik der Lokführer schreckt die Verkehrsexperten der Parteien auf. Jetzt mischt sich die Politik in den Arbeitskampf ein - und fordert von den Tarifparteien, endlich Frieden zu schließen.
Pendler im Bahn-Chaos, Güterzüge, die ihr Ziel nicht erreichen: Der für Freitag vorgesehene bundesweite Streik der Lokführer schreckt die Verkehrsexperten der Parteien auf. Jetzt mischt sich die Politik in den Arbeitskampf ein - und fordert von den Tarifparteien, endlich Frieden zu schließen.
Joschka Fischers Buchvorstellung: "Eine Abrechnung sieht anders aus" - Politik - SPIEGEL ONLINE - Nachrichten
Joschka Fischers Buchvorstellung: "Eine Abrechnung sieht anders aus" - Politik - SPIEGEL ONLINE - Nachrichten
Der selbsternannte letzte Live-Rock'n'Roller der deutschen Politik hat heute sein erstes Soloalbum vorgestellt: Die Memoiren seiner Außenminister-Jahre, Band eins. Joschka Fischer genießt seine neue Rolle als unabhängiger Großkommentator und Elder Statesman.
Der selbsternannte letzte Live-Rock'n'Roller der deutschen Politik hat heute sein erstes Soloalbum vorgestellt: Die Memoiren seiner Außenminister-Jahre, Band eins. Joschka Fischer genießt seine neue Rolle als unabhängiger Großkommentator und Elder Statesman.
Wednesday, October 03, 2007
Kurz vor dem Streik: Bahn-Belegschaft schlägt sich auf Seite der Lokführer - Wirtschaft - SPIEGEL ONLINE - Nachrichten
Kurz vor dem Streik: Bahn-Belegschaft schlägt sich auf Seite der Lokführer - Wirtschaft - SPIEGEL ONLINE - Nachrichten
Die Stimmung in der Bahn-Belegschaft kippt: Bisher standen die Lokführer mit ihrer Forderung nach einem eigenen Tarifvertrag ziemlich isoliert da. Doch jetzt solidarisieren sich immer mehr Mitarbeiter mit der Gewerkschaft GDL - aus Ärger über die Konzernleitung.
Die Stimmung in der Bahn-Belegschaft kippt: Bisher standen die Lokführer mit ihrer Forderung nach einem eigenen Tarifvertrag ziemlich isoliert da. Doch jetzt solidarisieren sich immer mehr Mitarbeiter mit der Gewerkschaft GDL - aus Ärger über die Konzernleitung.
FT.com / Companies / Financial services - Deutsche Bank shares rise in spite of losses
FT.com / Companies / Financial services - Deutsche Bank shares rise in spite of losses
Deutsche Bank shares rise in spite of losses
By Chris Hughes and Gillian Tett in London and Ivar Simensen in Frankfurt
Published: October 3 2007 10:08 | Last updated: October 3 2007 10:08
Deutsche Bank on Wednesday became the latest big investment bank to see its shares rise after revealing it had suffered billions of dollars worth of losses in the recent credit turmoil.
In spite of announcing that its investment banking unit would post a third-quarter pre-tax loss of up to €350m, after €2.2bn ($3.1bn) of charges relating to leveraged loans, structured credit products and trading, shares in the German bank closed up 2 per cent as investors welcomed clarification of the extent of its losses.
However, Deutsche also said third-quarter net profits for the group would top €1.4bn, boosted by tax credits. It also reiterated its pre-tax profits target for 2008. However, Jeremy Sigee, analyst at Citi, said the announcement represented a profit warning.
Josef Ackermann, chairman of Deutsche’s management board, said the group saw “substantial opportunities in investment banking after this period of correction”.
The comments were made ahead of an investor conference hosted by Merrill Lynch in London, where Brady Dougan, chief executive of Credit Suisse, echoed Mr Ackermann’s optimism by predicting that his bank could gain market share from rivals once the credit squeeze eased.
Deutsche’s clarification came in the wake of Monday’s profit warnings from rivals Citigroup, UBS and Credit Suisse. These have given investors confidence that the financial cost of the credit crisis is becoming measurable after weeks of uncertainty.
UBS gained 1.4 per cent Wednesday, closing at SFr67.35, while Credit Suisse closed up 1.1 per cent at SFr81.55. US peers including Merrill Lynch and JPMorgan Chase were also up in early trading.
The global sector is up 2.5 per cent this week.
The rally continued against a backdrop of continued weak sentiment in the money markets, in spite of the vast volume of liquidity that central banks have pumped into the system in recent weeks.
Huw van Steenis, analyst at Morgan Stanley, said the banks’ disclosure, coupled with expectations of rate cuts, was attracting long-only investors to increase their exposure to banks. This was forcing hedge funds to close short positions.
“The market views the writedowns at the investment banks cathartically,” he said. “UBS’s profit warning was an inflection point for European banks.”
Robert Law, banks analyst at Lehman Brothers, said: “The capital market banks have taken marks on their exposure and that builds confidence.
“One of the biggest issues with the sector has been that people haven’t really known where these exposures are, and how much they are.”
But others questioned the market’s newfound confidence.
Steve Russell, investment director at Ruffer, the London-based asset manager, said: “The worse the news is, the more the market goes up. As uncertainty is reduced, it should make sense to attempt some bottom-fishing – but we think it is far too early to do so.
“The real issue is that a whole area of [capital markets] banking business is now closed off for a long time. There’s a big elephant of a credit crunch around the corner and we haven’t seen anyone adjust their earnings forecasts for that.”
Crispin Odey, founder of Odey Asset Management, the London-based hedge fund, said hedge funds that had bet that banks’ shares would continue to fall were having a ”really painful” week. “Everyone involved in the interbank market can’t believe how strong the equity markets are,” he said.
Copyright The Financial Times Limited 2007
Deutsche Bank shares rise in spite of losses
By Chris Hughes and Gillian Tett in London and Ivar Simensen in Frankfurt
Published: October 3 2007 10:08 | Last updated: October 3 2007 10:08
Deutsche Bank on Wednesday became the latest big investment bank to see its shares rise after revealing it had suffered billions of dollars worth of losses in the recent credit turmoil.
In spite of announcing that its investment banking unit would post a third-quarter pre-tax loss of up to €350m, after €2.2bn ($3.1bn) of charges relating to leveraged loans, structured credit products and trading, shares in the German bank closed up 2 per cent as investors welcomed clarification of the extent of its losses.
However, Deutsche also said third-quarter net profits for the group would top €1.4bn, boosted by tax credits. It also reiterated its pre-tax profits target for 2008. However, Jeremy Sigee, analyst at Citi, said the announcement represented a profit warning.
Josef Ackermann, chairman of Deutsche’s management board, said the group saw “substantial opportunities in investment banking after this period of correction”.
The comments were made ahead of an investor conference hosted by Merrill Lynch in London, where Brady Dougan, chief executive of Credit Suisse, echoed Mr Ackermann’s optimism by predicting that his bank could gain market share from rivals once the credit squeeze eased.
Deutsche’s clarification came in the wake of Monday’s profit warnings from rivals Citigroup, UBS and Credit Suisse. These have given investors confidence that the financial cost of the credit crisis is becoming measurable after weeks of uncertainty.
UBS gained 1.4 per cent Wednesday, closing at SFr67.35, while Credit Suisse closed up 1.1 per cent at SFr81.55. US peers including Merrill Lynch and JPMorgan Chase were also up in early trading.
The global sector is up 2.5 per cent this week.
The rally continued against a backdrop of continued weak sentiment in the money markets, in spite of the vast volume of liquidity that central banks have pumped into the system in recent weeks.
Huw van Steenis, analyst at Morgan Stanley, said the banks’ disclosure, coupled with expectations of rate cuts, was attracting long-only investors to increase their exposure to banks. This was forcing hedge funds to close short positions.
“The market views the writedowns at the investment banks cathartically,” he said. “UBS’s profit warning was an inflection point for European banks.”
Robert Law, banks analyst at Lehman Brothers, said: “The capital market banks have taken marks on their exposure and that builds confidence.
“One of the biggest issues with the sector has been that people haven’t really known where these exposures are, and how much they are.”
But others questioned the market’s newfound confidence.
Steve Russell, investment director at Ruffer, the London-based asset manager, said: “The worse the news is, the more the market goes up. As uncertainty is reduced, it should make sense to attempt some bottom-fishing – but we think it is far too early to do so.
“The real issue is that a whole area of [capital markets] banking business is now closed off for a long time. There’s a big elephant of a credit crunch around the corner and we haven’t seen anyone adjust their earnings forecasts for that.”
Crispin Odey, founder of Odey Asset Management, the London-based hedge fund, said hedge funds that had bet that banks’ shares would continue to fall were having a ”really painful” week. “Everyone involved in the interbank market can’t believe how strong the equity markets are,” he said.
Copyright The Financial Times Limited 2007
Monday, October 01, 2007
FT.com / Home UK / UK - End of an era in Germany as Stoiber steps aside
FT.com / Home UK / UK - End of an era in Germany as Stoiber steps aside
End of an era in Germany as Stoiber steps aside
By Hugh Williamson in Berlin
Published: October 1 2007 03:00 | Last updated: October 1 2007 03:00
An era in German politics ended at the weekend when Edmund Stoiber exited national politics, leaving the future of wealthy Bavaria in the hands of the country's toughest law-and-order -politician.
Mr Stoiber, premier of the southern German state since 1993, was central in building one of Europe's most powerful regional economies, attracting thousands of hi-tech, engineering and media companies and reducing unemployment to half the national average.
Delegates from his Christian Social Union gave him a warm send-off at a weekend congress in Munich even though his departure - first announced in January - was tinged with anger. He was forced to step down earlier than planned after mishandling a scandal and alienating many CSU members.
The 66-year old urged the party to remain the "flag-bearer" in Germany of conservative, pro-family values.
Mr Stoiber - who in national elections in 2002 came within 6,000 votes of toppling former chancellor Gerhard Schröder - is due to take up an unpaid post heading European Union efforts to cut red tape.
He will be replaced as premier by Günther Beckstein, Bavarian interior minister since 1993, who is well known for his regular calls for tougher security laws and tighter controls on -foreigners.
Mr Stoiber handed leadership of the CSU to Erwin Huber, the Bavarian economics minister, who won a rare election run-off for the post, fending off bids from Horst Seehofer, national farming minister, and Gabriele Pauli, whose anti-Stoiber campaign in January triggered his exit.
A smooth political transition in Bavaria is crucial for Angela Merkel, German chancellor, and her Christian Democrats - the CSU's larger sister party - if she is to win re-election in 2009. The CSU regularly gains more than 50 per cent of votes in Bavaria, compared with 30-40 per cent for the CDU, but support dipped this year after the turmoil over Mr Stoiber's departure.
The chancellor praised Mr Stoiber at the CSU congress, but will be relieved that one of her most powerful political irritants has stepped aside.
Mr Beckstein - due to be elected premier on October 9 - promised "continuity" with Mr Stoiber's mix of liberal economic policy and arch-conservative social values.
In the short term any changes will be more in style than substance. Despite his tough image Mr Beckstein has a more genial, inclusive approach than the austere Mr Stoiber, who lacks Bavaria's famous joviality. Mr Huber, a former tax inspector seen as competent but uncharismatic, promised to retain the CSU's absolute majority, in place since 1962, in state elections next year.
In the longer term the two men - rivals until a few months ago - may struggle to maintain Mr Stoiber's impressive record. His decisions in recent years to sell off most of the state's assets and introduce long-term austerity measures leave them with only limited room for manoeuvre. Mr Stoiber's pledge, only days before stepping down, that Bavaria would help build a high-tech rail link from Munich airport to the centre of the regional capital could also prove costly.
Copyright The Financial Times Limited 2007
End of an era in Germany as Stoiber steps aside
By Hugh Williamson in Berlin
Published: October 1 2007 03:00 | Last updated: October 1 2007 03:00
An era in German politics ended at the weekend when Edmund Stoiber exited national politics, leaving the future of wealthy Bavaria in the hands of the country's toughest law-and-order -politician.
Mr Stoiber, premier of the southern German state since 1993, was central in building one of Europe's most powerful regional economies, attracting thousands of hi-tech, engineering and media companies and reducing unemployment to half the national average.
Delegates from his Christian Social Union gave him a warm send-off at a weekend congress in Munich even though his departure - first announced in January - was tinged with anger. He was forced to step down earlier than planned after mishandling a scandal and alienating many CSU members.
The 66-year old urged the party to remain the "flag-bearer" in Germany of conservative, pro-family values.
Mr Stoiber - who in national elections in 2002 came within 6,000 votes of toppling former chancellor Gerhard Schröder - is due to take up an unpaid post heading European Union efforts to cut red tape.
He will be replaced as premier by Günther Beckstein, Bavarian interior minister since 1993, who is well known for his regular calls for tougher security laws and tighter controls on -foreigners.
Mr Stoiber handed leadership of the CSU to Erwin Huber, the Bavarian economics minister, who won a rare election run-off for the post, fending off bids from Horst Seehofer, national farming minister, and Gabriele Pauli, whose anti-Stoiber campaign in January triggered his exit.
A smooth political transition in Bavaria is crucial for Angela Merkel, German chancellor, and her Christian Democrats - the CSU's larger sister party - if she is to win re-election in 2009. The CSU regularly gains more than 50 per cent of votes in Bavaria, compared with 30-40 per cent for the CDU, but support dipped this year after the turmoil over Mr Stoiber's departure.
The chancellor praised Mr Stoiber at the CSU congress, but will be relieved that one of her most powerful political irritants has stepped aside.
Mr Beckstein - due to be elected premier on October 9 - promised "continuity" with Mr Stoiber's mix of liberal economic policy and arch-conservative social values.
In the short term any changes will be more in style than substance. Despite his tough image Mr Beckstein has a more genial, inclusive approach than the austere Mr Stoiber, who lacks Bavaria's famous joviality. Mr Huber, a former tax inspector seen as competent but uncharismatic, promised to retain the CSU's absolute majority, in place since 1962, in state elections next year.
In the longer term the two men - rivals until a few months ago - may struggle to maintain Mr Stoiber's impressive record. His decisions in recent years to sell off most of the state's assets and introduce long-term austerity measures leave them with only limited room for manoeuvre. Mr Stoiber's pledge, only days before stepping down, that Bavaria would help build a high-tech rail link from Munich airport to the centre of the regional capital could also prove costly.
Copyright The Financial Times Limited 2007
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