German business groups expressed dismay on Thursday after Chancellor Angela Merkel and state leaders agreed a gradual easing of coronavirus curbs but added an “emergency brake” to reimpose restrictions if case numbers get out of control, Reuters reported. The tentative reopening plan dashed any hopes of a swift rebound in consumer spending this month to end a weak first quarter on a stronger note. Some economists also worried about long-term damage to the economy and people’s opportunities in life.
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Embattled financial startup Greensill Capital plans to file for insolvency in the U.K. this week, as it simultaneously moves toward a deal to sell its operating business to Apollo Global Management, the Wall Street Journal reported. Also Wednesday, in a dramatic ratcheting up of Greensill’s problems, Germany’s top financial regulator BaFin referred matters related to the firm’s banking unit, Greensill Bank AG, to criminal prosecutors, according to a spokesman for the Bremen prosecutors office.
Interest rates have been negative in Europe for years. But it took the flood of savings unleashed in the pandemic for banks finally to charge depositors in earnest, the Wall Street Journal reported. Germany’s biggest lenders, Deutsche Bank AG and Commerzbank A , have told new customers since last year to pay a 0.5% annual rate to keep large sums of money with them. The banks say that they can no longer absorb the negative interest rates the European Central Bank charges them. The more customer deposits banks have, the more they have to park with the central bank.
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The head of Germany’s accounting watchdog, under fire for failing to spot wrongdoing ahead of the collapse of the payments company Wirecard, is stepping down, Reuters reported. The agency, formally known as the Financial Reporting Enforcement Panel (FREP), said in a statement on Wednesday that President Edgar Ernst is leaving his post at his own wish, effective Dec. 31. Ernst has also come under criticism for potential conflicts of interest because he held seats on supervisory boards of major corporations, including real-estate company Vonovia, retailer Metro and tour operator TUI.
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German brewers have been forced to throw away unsold beer and have asked the government for financial aid as the coronavirus lockdown reduces demand, they said on Monday, Reuters reported. German pubs, hotels and restaurants have been closed since November in the country’s second lockdown following the first one earlier last year. The brewers called on the German government to give beer breweries aid under the country’s programmes to help industry recover from the impact of the coronavirus crisis. Germany’s government has given financial aid to pubs and bars but not breweries.
German Finance Minister Olaf Scholz warned next year’s federal budget will be a “challenge,” while pledging not to cut investment or welfare spending, Bloomberg News reported. Scholz, who is running as the Social Democrats’ candidate for chancellor in September’s election, is due to present a draft 2022 budget next month. His comments highlight the fiscal conundrum facing the next government, which polls suggest will again be led by Chancellor Angela Merkel’s conservative bloc after she steps down.
Airline maintenance provider Lufthansa Technik Philippines (LTP) will lay off 300 employees in April due to the impact of the COVID-19 pandemic on the airline industry that forced some of its clients into bankruptcy, The Star reported. "This decision comes after careful study and consideration of the business situation as a result of the pandemic, its effects on the aviation industry," LTP president and CEO Elmar Lutter said in a letter to employees dated Feb. 11.
Deutsche Bank AG has scrapped its plan to sell hundreds of millions of euros of debt for German pharmaceutical company Gruenenthal GmbH due to a lack of interest from investors, Bloomberg News reported. The loan was intended to replace some of the company’s existing financing. The family-owned business, which makes painkillers including opioid drugs such as Tramadol, had unsecured term loans and Schuldschein worth 935 million euros ($1.13 billion) due to mature this year, Bloomberg data show.
Angela Merkel will give a welcome speech at Deutsche Bank’s annual New Year reception on Thursday, marking a rare appearance by the German chancellor at an event by a bank that for years has been battling losses and scandals, Reuters reported. Merkel will be speaking just a week after the lender reported its first annual profit since 2014, an important milestone in CEO Christian Sewing’s efforts to revive Deutsche’s fortunes. But investors and analysts said that despite Merkel’s symbolic vote of confidence, the bank’s prospects remain uncertain.
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Germany faces a wave of dealership bankruptcies unless car showrooms are allowed to reopen soon, the ZDK industry association said, Automotive News Europe reported. Showrooms have been shut since mid-December when the German government tightened measures to slow rising cases of the coronavirus. "The situation in automobile retail becomes more difficult with each passing week," Thomas Peckruhn, ZDK vice president, said in a statement. German Chancellor Angela Merkel will chair a meeting on Feb.