Germany

A new week opens in Europe with yet another warning sign over the health of the German economy, with new data showing imports and exports fell in February amid a fraught global trading environment, the Financial Times reported. Exports fell 1.3 per cent month on month to €108.8bn, according to the Federal Statistics Office, while imports dropped 1.6 per cent to €90.9bn. The declines were sharper than expected: a Reuters poll of economists had forecast falls of 0.5 per cent and 0.7 per cent.

Indebted German wind turbine manufacturer Senvion said on Monday it was continuing talks aimed at shoring up its finances and would not rule out any options, Reuters reported. The Hamburg-based company, previously known as REpower, has faced delays and penalties related to big projects. It needs at least 100 million euros ($112 million) in the short term to keep operating, two financial sources told Reuters. Senvion, which has more than a billion euros of debt, was not immediately available to comment.

German factory orders have deteriorated at the fastest pace since the financial crisis as the sector suffered from rising Brexit uncertainties and a slowdown in the global economy, the Financial Times reported. New factory orders fell 4.2 per cent in February from the previous month as foreign orders slumped, according to provisional data from Germany’s statistics office released on Thursday. The drop was the biggest fall since January 2017, according to Factset. Analysts polled by Reuters had expected a small month-on-month rise.

Germany’s factory sector shrunk at an even quicker clip than initially reported in March, according to a closely watched survey of industry executives. The IHS Markit purchasing managers’ index was revised to 44.1 in March — the lowest since the eurozone debt crisis in February 2012 — from a ‘flash’ estimate of 44.7, the Financial Times reported. It had registered 47.6 the previous month, slipping at that time just below the 50 line that separates expansion from contraction.

Germany has sold 10-year debt with a negative yield for the first time since the autumn of 2016, amid fears of a worsening global economic outlook, the Financial Times reported. Investors have moved into haven assets in recent weeks on rising concerns about slowdowns in major economies, such as Germany and the US. The move intensified after the US Federal Reserve last week ditched plans for raising interest rates this year.

The idea behind merging two of Europe’s weakest financial institutions—Deutsche Bank and Commerzbank—is that together, they can somehow lean on each other and steady their fortunes. Formal talks are continuing and there is no guarantee a deal will happen. But a look at the numbers shows both the urgency and the difficulty of the task, The Wall Street Journal reported. Germany’s banking market is fragmented. At nearly 1,600, the country has more banks than the U.K., France, Italy and Spain combined.

Germany’s top economic experts have slashed their growth forecast for 2019 from 1.5 per cent to 0.8 per cent, offering fresh confirmation that Europe’s largest economy is losing momentum, the Financial Times reported. “The period of high growth in the German economy is over for now. But given the strong domestic economy there is no reason to expect a recession,” said Christoph Schmidt, a professor of economy and one of the five members of Germany’s government-appointed council of economic experts.

Deutsche Bank and Commerzbank, Germany’s two biggest banks, are in talks to merge. The news broke over the weekend, hot on the heels of a Deutsche Bank research report called “How to fix European banking... and why it matters.” So we have a rare case of a merger suitor publishing a big intellectual defense of its actions before anyone knew about the talks. The problem is that the intellectual defense can still be breached, a Bloomberg View reported.

A rising share of unfilled job positions in Germany, despite weakening industrial production, pushed the eurozone’s vacancy rate to a record, the Financial Times reported. In contrast, vacancies remained low in most peripheral economies. The region’s job vacancy rate accelerated to 2.3 per cent in the final quarter of last year, compared with 2.1 per cent in the previous three months and the highest ratio since records began in 2009, Eurostat data released on Monday revealed.

Deutsche Bank and Commerzbank have formally opened talks on a controversial merger that would reshape Germany’s financial sector and create the eurozone’s second-largest lender by assets, the Financial Times reported. The senior management of Germany’s two largest listed lenders said on Sunday they had begun exploratory talks, after the executive boards of both banks agreed to evaluate the benefits of a tie-up.