Germany

Germany is blaming the collapse of a shipyard business on its Malaysia-based owner Genting Group, saying the conglomerate refused to contribute to a government bailout plan, the Associated Press reported. The MV Werften shipyard in northeastern Germany, which Genting bought in 2016, filed for bankruptcy protection Monday after getting into financial difficulties over the construction of a massive cruise liner. The German government had earlier said it was willing to discuss a 600 million-euro ($678 million) bailout plan that would protect 1,900 jobs.

German retail sales rose unexpectedly in November, data showed on Tuesday, lifting them to a record annual high despite renewed COVID-19 restrictions which held back a consumer-led recovery in Europe's largest economy, Reuters reported. The Federal Statistics Office said retail sales were up 0.6% on the month in real terms. That beat a Reuters forecast of a fall of 0.5%. For 2021, retail sales rose 0.9% in real terms and 3.1% in nominal terms, reaching record highs despite curbs on non-essential visits to the shops.

German unemployment fell more than expected in December, data showed on Tuesday, in a further sign that the labour market in Europe's largest economy remains resilient despite rising COVID-19 infections, Reuters reported. The Labour Office said the number of people out of work fell by 23,000 in seasonally adjusted terms to 2.405 million. A Reuters poll had forecast a fall of 15,000. "The labor market developed well at the end of the year. The recovery of the previous months continued," Labour Office head Detlef Scheele said.

The new German government will offer tax relief to individuals and companies worth at least 30 billion euros ($34.1 billion) in this legislative period, Finance Minister Christian Lindner was quoted as saying on Sunday, Reuters reported. "We will relieve people and small and medium-sized businesses by significantly more than 30 billion euros," Lindner told the Bild am Sonntag newspaper.

Germany has long been ahead of the curve as a source of technical innovation and manufacturing. Now it is leading much of the developed world toward a demographic cliff edge that could put a damper on Europe’s largest economy, raising pressure on its pension system and pushing inflation higher for years to come, the Wall Street Journal reported. Economists forecast that Germany’s workforce could peak as soon as 2023 and then shrink by up to five million people by the end of the decade.

The German government made billions of euros from debt issuance this year thanks to negative interest rates on its securities, according to a letter, seen by Reuters, from Finance Ministry State Secretary Florian Toncar to a left wing lawmaker, Reuters reported. When issuing federal securities to finance the budget and special funds, "payments amounting to around 5.855 billion euros were collected", according to Toncar's letter in response to a question from Christian Goerke, of the far-left Linke party.

Germany’s federal government plans to sell the second-highest amount of debt on record next year, as aggressive spending to offset the impact of the coronavirus pandemic continues, Bloomberg News reported. Debt issuance will shrink to about 410 billion euros ($464 billion) in 2022, compared with a record of around 480 billion euros this year, according to the German finance agency’s issuance plan published Thursday. The borrowing includes inflation-linked bonds worth as much as 8 billion euros, and Green bonds of 12.5 billion euros, a similar volume to this year, the agency said by email.

A deputy German finance minister warned of “permanent inflation risks” over the longer term, a contrast with the European Central Bank’s position that such pressures probably won’t endure, Bloomberg News reported. Florian Toncar, a deputy to new Finance Minister Christian Lindner, said inflation will likely moderate to 2% or 3% after the Covid-19 surge subsides, easing a once-in-a-generation cost-of-living squeeze in Europe’s largest economy. But supply shortfalls, rising wages and spending on Germany’s ambitious climate agenda will contribute to price pressures.

Germany’s soon-to-be finance minister, Christian Lindner, suggested that the euro region should be careful to prevent swelling government debt burdens from dictating the path of monetary policy, Bloomberg News reported. “Debts in the European Economic and Monetary Union have increased sharply due to the pandemic,” Lindner, the chairman of the pro-business Free Democrats, said at news conference in Berlin on Tuesday. “That’s why we are sensitive to avoiding a situation of fiscal dominance in the future,” he added.

Germany's incoming Finance Minister Christian Lindner on Tuesday vowed to champion solid public finances and a reduction of debt levels across the euro zone so that the European Central Bank (ECB) could fight inflation without hesitation if needed, Reuters reported. Lindner's comments, posted on Twitter, came after data showed on Monday that German consumer price inflation accelerated further in November to reach its highest level in nearly three decades. "The inflation gives rise to legitimate concerns.