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.
Germany’s finance minister denied any blame for the multi-billion-euro Wirecard fraud on Thursday, pointing the finger at the company and its auditors, EY, for waving the firm’s accounts through for a decade, Reuters reported. Olaf Scholz joins a long list of politicians and officials who have denied responsibility for slipshod oversight and what critical lawmakers see as a pro-Wirecard bias that failed to avert Germany’s biggest post-war fraud.
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The sticky issue of affordable housing moved up Germany’s political agenda after the country’s top court overturned Berlin’s controversial rent freeze, Bloomberg News reported. The decision on Thursday by the Federal Constitutional Court to topple the aggressive clampdown on rents exposes thousands of voters to higher living expenses and highlights the housing squeeze in German cities. “The ruling is bitter, hitting tenants in 1.5 million Berlin flats hard,” said Lukas Siebenkotten, president of Germany’s tenant association.
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The German shipyard Nobiskrug has filed for insolvency, according to reports by German news broadcasters, Super Yacht Times reported. During the filings and insolvency proceedings, which commenced on 12 April, Nobiskrug cited “critical developments” on yacht construction having had negative consequences on investment and potential profitability, as the main reasons.
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