German business morale plummeted in March as companies worried about rising energy prices, driver shortages and the stability of supply chains in the wake of the war in Ukraine, pointing to a possible future recession, a survey showed on Friday, Reuters reported. The Ifo institute said its business climate index dropped to 90.8 in March from a downwardly revised 98.5 in February. A Reuters poll of analysts had pointed to a March reading of 94.2.
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Germany
German retirees will get a hefty pension increase this year, a result largely of higher wages in Europe’s biggest economy as inflation has climbed sharply, the government said Tuesday, the Associated Press reported. The Labor Ministry said pensions will increase by 5.35% in the former West Germany on July 1 and by 6.12% in the formerly communist east. There was no increase in the west last year and an increase of 0.72% in the east as the economy was hit by the coronavirus pandemic.
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BMW and Volkswagen warned this week that Russia’s invasion of Ukraine is causing shortages of some vital components, forcing them to reduce vehicle production in Europe, the Associated Press reported. The two German carmakers said the war is having a “negative” effect on auto supply chains, which have already been battered by shortages of semiconductors. BMW said Wednesday that bottlenecks at its suppliers in Ukraine have forced the automaker to adjust or interrupt production at a number of factories, which is likely to have a negative impact on vehicle sales figures.
The Munich prosecutors’ office filed a series of charges against former Wirecard AG Chief Executive Officer Markus Braun, Germany’s Handelsblatt newspaper reported. Braun was accused of fraud, misappropriation of corporate assets, accounting fraud and market manipulation. Charges were also filed against Oliver Bellenhaus, previously a managing director of a Dubai-based Wirecard unit, and Stephan von Erffa, the former chief accountant and deputy chief financial officer.
Germany has earmarked 200 billion euros ($220 billion) to fund industrial transformation between now and 2026, including climate protection, hydrogen technology and expansion of the electric vehicle charging network, its finance minister said, Reuters reported. "200 billion euros in funding for the transformation of the economy, society and the state," Christian Lindner told public broadcaster ARD on Sunday, adding that this also included the removal of renewable energy levies.
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German annual inflation rose in February after a slight decline at the beginning of the year as the Ukraine conflict pushed energy prices even higher and coronavirus-related supply bottlenecks continued, preliminary data showed on Tuesday, Reuters reported. Consumer prices, harmonised to make them comparable with inflation data from other European Union countries (HICP), rose 5.5% on the year, the Federal Statistics Office said. The national consumer price index (CPI) rose 5.1% year on year after dipping in January to 4.9% from 5.3% in December - the highest rate in almost 30 years.
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Deutsche Lufthansa AG has told pilots that it could launch a new airline to save on costs if negotiations on a new union contract collapse, Bloomberg News reported. While it could lead to walkouts, such a move would be aimed at increasing Lufthansa’s leverage after months of talks that have failed to produce an agreement on pay. A fresh operating certificate would enable the German company to dismiss pilots, cabin crew and ground staff working under the old structure, then offer to rehire them with less costly contracts.
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Germany and the European Union are in a position to decide on further sanctions against Russia in the event of a complete Russian invasion of Ukraine, which cannot be ruled out, Chancellor Olaf Scholz said on Tuesday, Reuters reported. Scholz said Russia's recognition of the two breakaway regions of Luhansk and Donetsk in eastern Ukraine was not compatible with international law and endangered the sovereignty of Ukraine. "We cannot accept this," Scholz was quoted as saying by broadcaster RTL, adding that respecting borders was important for peace in Europe.
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A former employee of investment bank Lazard was sentenced on Friday to an 18-month suspended jail term by a German court after being found guilty of insider trading, a court spokesperson said, Reuters reported. The ruling by the Frankfurt regional court came after the ex-employee was charged in 2021 for passing on tips about upcoming takeovers of listed firms to the former head of an insurance company for almost two years.
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Germany is set to ease COVID-19 restrictions as a wave of infections from the Omicron coronavirus variant seems to have passed its peak in most federal states, a draft plan seen by Reuters showed on Wednesday. In the three stage plan, restrictions on private indoor meetings will be dropped for those vaccinated or recovered from the virus, according to the draft, prepared for a meeting between Chancellor Olaf Scholz and the heads of the federal states on Wednesday.
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