Germany’s economy contracted more than expected in the first quarter amid coronavirus lockdown measures, according to statistics released Tuesday, but a leading indicator showed that businesses’ optimism is rising as the pace of vaccinations increases, the Associated Press reported. The Federal Statistical Office said that the first quarter gross domestic product in Germany, Europe’s largest economy, dropped by 1.8% over the fourth quarter of 2020, according to figures adjusted for price, seasonal and calendar factors. The office’s preliminary estimate had been a drop of 1.7%.
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Germany's two biggest listed landlords Vonovia and Deutsche Wohnen have agreed to join forces in an 18 billion euro ($22 billion) deal they hope will defuse tensions over soaring rents ahead of general elections in September, Reuters reported. The country's biggest merger this year will create a European real estate giant with 550,000 apartments. It comes as Deutsche Wohnen has become the focus of popular anger in Berlin over tenant rights and affordable housing.
One of Germany’s wealthiest families is selling down the last major investment of Heinz Hermann Thiele, three months after the billionaire patriarch’s death, Bloomberg News reported. The Thiele family’s KB Holding GmbH sold more than half its stake in Deutsche Lufthansa AG, Europe’s biggest airline, disposing of 33 million shares at a 9.80 euros each. While that’s a 9.8% discount to the stock’s closing price the previous day, the heirs likely broke even on the transaction given the original purchase price.
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Lufthansa said on Tuesday that it was seeing a surge in demand for flights to the United States and to European destinations following a loosening of German travel restrictions as coronavirus case numbers decline, Reuters reported. Demand for summer flights to New York, Miami and Los Angeles has increased by up to 300%, the German airline group said, adding it would lay on extra flights from June and has restarted services to Orlando and Atlanta.
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Germany loosened travel rules to allow people fully vaccinated against Covid-19 to enter the country without needing to get tested or go into quarantine, Bloomberg News reported. The rules, which also apply to those who have recovered from the virus, were approved by Chancellor Angela Merkel’s cabinet on Wednesday. One-third of German residents have received at least one dose of a Covid vaccine, and nearly 10% have been fully inoculated. As the pace ramps up, Germany has granted more privileges to people immune from the disease, including easing trips to hairdressers.
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Corporate insolvencies in Germany fell by 21.8% on the year in February, the Federal Statistics Office said on Tuesday, continuing a downtrend that saw them hit their lowest level since 1999 last year thanks to a waiver during the pandemic, Reuters reported. Germany introduced the waiver last March, when the COVID-19 pandemic hit, part of a package of measures aimed at supporting businesses but which gave rise to the charge that the government was simply propping up “zombie companies” with no future. Insolvencies duly fell. But since October, Berlin has phased out the waiver.
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Lufthansa is working with Deutsche Bank and Bank of America to sound out investors about a capital increase worth roughly 3 billion euros ($3.7 billion), possibly as soon as June, Reuters reported. The final size and timing of the rights issue to repay state aid Lufthansa received during the pandemic will be subject to market conditions and the German airline is expected to opt for a June/July or September/October window.
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While the drama of Greensill’s collapse is unfolding in financial centers like London and Zurich, and has sparked a scandal at the top of British politics, blue-collar towns could face the worst consequences if GFG fails to refinance, the Wall Street Journal reported. GFG employs about 35,000 people, mainly in economically deprived parts of Europe, Australia and the U.S., with some sites at risk of closure if Sanjeev Gupta doesn’t secure new finance and governments don’t step in.
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A year-long waiver on insolvency filings has ended in Germany and there are already signs that bankruptcies are starting to pick up in Europe’s largest economy, Reuters reported. Germany introduced the waiver last March, when the COVID-19 pandemic hit, part of a package of measures aimed at supporting businesses but which gave rise to the charge that the government was simply propping up “zombie companies” with no future. Insolvencies duly fell. But since October, Berlin has phased out the waiver.
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World shares advanced Thursday ahead of the release of U.S. economic growth data and following a speech by President Joe Biden outlining ambitious plans for beefing up early education and other family oriented policies, the Associated Press reported. London’s FTSE 100 jumped 0.7% to 7,013.40. In Paris, the CAC40 climbed 0.6% to 6,344.17. Germany’s DAX slipped 0.2% to 15,262.39 as a report showed weakening consumer confidence. The future for the Dow industrials rose 0.4% and that for the S&P 500 surged 0.6%. U.S.