The main headlines of the day



German government to invest €1bn in electric vehicle development

The German government wants to invest €1bn in the development of electric vehicles. Athough the market has been disappointing so far Germany wants to maintin its goal of one million electric cars by 2020.

Herman Van Rompuy and José Manuel Barroso want more power for the European Union. The Think Tank Open Europe says: The true core concept of a European culture is that it is decentralized. (Photo: consilium)

Open Europe: Grand European plans are doomed to fail

Open Europe's Pieter Cleppe says that where the EU has gained a lot of decision making power, it has failed most of the time. He sees democracy best performed in sovereign nations and wants the European institutions being lean and efficient.

Markus Kerber, managing director at the Bundesverband der Deutschen Industrie (BDI), the Federation of German Industries. (Photo: DWN/Jakob Reinhardt)

Federation of German Industries wants more German leadership in resolving the Euro crisis

Markus Kerber, magaging director of the Federation of German Industries (BDI), want to see German and European industries taking leadership to resolve the Euro crisis. As banks and governments are locked into their own problems, European industrial leaders should take the helm and try to stimulate growth with significant investments.


German industry leaders urge government to ratify UN convention against corruption

Leading German CEOs appeal to the German Parliament that the United Nations Convention Against Corruption (UNCAC) should get brought into effect as soon as possible. Germany is one of the few countries not having ratified the agreement. Two other are Syria and Saudi-Arabia.


German Ecomony Minister “doubtful” whether Greece will remain part of Euro area

German Minister for Economics and Technology Phillip Roesler expressed his doubt regarding if Greece even be capable to conduct a proper austerity program.

As crisis worsens, surprise visit by Spain’s de Guindos to Berlin

Spain’s Economy Minister Luis de Guindos announced in front of the Spanish Parliament, Spain would not need a complete bailout or rescue package. Despite this optimism it has now been announced that he is flying to Berlin tomorrow.

Spanish 10 year sovereign debt came under pressure on Wednesday. (Chart: Bloomberg)

Investors buy German Bunds at record negative yields, amid uncertainty over Euro periphery

On Wednesday Germany again sold 2 year-Bunds at negative yields. The yield was at 0.06%. This was the lowest value ever. The yield was at 0.06%. This was the lowest value ever. At the moment these are perceived to be a safe haven in the bond market amid ongoing uncertainties in Spain and Italy.

Georg Fahrenschon. (Photo: DSGV)

German Savings Banks oppose bailing out faltering banks with the money of German savers

In an unusually bold statement, the German Savings Bank Association (DSGV) expressed deep concerns about a banking union in Europe. The concept was based on "completely false assumptions" and was aimed only at bailing out banks using the money of German savers. Georg Fahrenschon, president of the DSGV, instead wants national regulators to be closely overseen by the ECB. He also wants the European Banking Authority (EBA) to be shut down altogether.

Although Italy's Mario Monti is pushing hard, Angela Merkel does not want to give in on German key objectives for Europe such as stability and accountability. (Photo: consilium)

Merkel says European banking union is a future task, not to happen soon

German Chancellor Angela Merkel is not willing to move ahead quickly with allowing direct aid for European banks from either EFSF or ESM. Instead, she confirmed that every state will have to guarantee for its banks. This will lead to higher deficits in states where banks need to apply for money from the bailout funds.

Court ruling may lead to new social benefits totalling €218 million for refugees

Germany, already one of the most desired countries for refuges may face a tough challenge in financing additional social benefits for people seeking for asylum. The Constitutional Court ruled that the benefits refugees are entitled now are far too low, forcing the German government to draft a new law with significantly higher payments to be financed by the taxpayer.

Economic professor Huelsmann warns debt crisis might turn into hyperinflation

Guido Huelsmann, professor for economics at the University of Angers, France, is convinced that the Euro will lose greatly on his value through and this will finally lead to the break-up of the common currency in the Euro zone.

Opel and Peugeot hit hard as European car makers report decline in sales

The branch association European Automobile Manufactures’ Association (ACEA) reported that the registration of cars has fallen by 2.8%. Countries such as Spain (-12.1%) or Italy (-24.4%) are reporting significant declines.

Janet Tavakoli.

Tavakoli: There should be thousands of felony indictments

Janet Tavakoli wants to end the ongoing fraud in the financial markets. Her summary of the reasons for the current disaster: Fraud, abuse, lack of acknowledgement of flawed models and how easily the system is gamed, in about equal measure.

If Italy fails, Angela Merkel will have a lot to explain to the German public. (Photo: consilium)

Open Europe: If Italy needs a bailout, sentiment in Germany will change

Pieter Cleppe from London based think tank Open Europe expects the ESM to get started despite growing political concern in several Euro countries. However, he thinks the ESM is too small to save the Euro.

German chancellor Angela Merkel and José Manuel Barroso, president of the EU commission, have spent quite some time in elaborating the ESM treaty. (Photo: consilium)

Citi: No subordination for European taxpayers in ESM legal framework

In an analysis, Citi concludes that the current legal framework for the ESM does not offer special protection for taxpayers as suggested to the German parliament ahead of last week's vote. The subordination clause would trigger the CDS, why such a protection is legally not possible without blowing up the system. German politics finds itself under scrutiny over not telling parliament the truth.

Italy appoints new finance minister to replace Monti

Italian Prime Minister Mario Monti will step down as finance minister and the current deputy minister Vittorio Grilli will take his place, the government said today. The new finance minister is an expert in privatisation and former Credit Suisse banker.

The German constitutional court held a hearing over whether the ESM is conflicting the German constitution.

German constitutional court shys away from ruling over ESM

The German constitutional court did not come up with a ruling over the question whether the European Stability Mechanism (ESM) conflicts with the German constitution. The hearing held in Karlsruhe showed the judges being overwhelmed by the complexity of legal challenges created by hasty decisions by leaders from the Euro zone.

Peter Keitel. (Photo: BDI)

Keitel says German industry remains in favour of Euro

Peter Keitel, president of the German Industry Association (BDI) expects the Euro to be here to stay. He sees significantly more benefits that downside for the common currency, outlining the particular advantages German exporters have trough the monetray union.

German manufacturers see Euro project in jeopardy

The Association of German manufacturers supports the European policy of Chancellor Angela Merkel.

China slowdown threatens German exports

The development of Chinese economy in the face of the recession in the EU and the decline in growth of the United States is of great importance – for the world economy and especially for Germany. But the latest data...