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.

Germany’s pace of growth will drop sharply as demand for the country’s products weakens amid a slowing global economy, according to a forecast by a leading research group, the Financial Times reported. The Munich-based Ifo Institute cut its 2019 economic growth rate estimate for the eurozone’s largest economy from 1.1 per cent to 0.6 per cent. The German economy expanded 1.5 per cent in 2018, the slowest since 2013, according to official data.

The German Finance Ministry urged Italian lenders to speed up a reduction of soured loans and make more progress in cutting risk, with the warning coming as the government in Berlin pushes for a merger of the country’s struggling banking titans. “The Italian banking sector has long been faced with various structural problems, including the high level of non-performing loans,” the ministry wrote in responses to lawmakers’ questions published by the Bundestag on Thursday.

A once-lucrative business within Deutsche Bank AG catering to hedge funds is on its way to becoming yet another casualty of the German lender’s chronic turmoil, Bloomberg News reported. The German firm’s revenue from prime services declined for a third straight year in 2018, while rivals Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co. all saw jumps, according to people with knowledge of the business.

Industrial production in the eurozone showed signs of stabilisation in January across sectors and in most countries, despite a contraction in Germany, the bloc’s biggest economy, the Financial Times reported. Output in the region rose 1.4 per cent from the previous month, rebounding from a decline of 0.9 per cent in December, better than a forecast from analysts in a Reuters poll of 1.0 per cent expansion, Eurostat figures revealed on Wednesday.

A sharp drop in German industrial production has added to fears that the country’s manufacturing slowdown has extended into 2019 and will weigh on the eurozone economy, the Financial Times reported. Industrial output fell 0.8 per cent in January, Germany’s statistics office said on Monday, in an indication of the threat to exports from weaker global demand and political uncertainty. Analysts polled by Reuters had expected the data to show a rise of 0.5 per cent.

German taxpayers could be left more than 600 million euros ($680 million) out of pocket in outstanding credit to Airbus for developing the A380 superjumbo, the Funke Mediengruppe will report on Monday citing an economy ministry statement, excerpts approved for release showed. Berlin loaned Airbus 942 million euros in 2002 in connection with the A380’s development, of which only a third has been repaid, the media group cited the statement as saying.

Probably the single biggest geopolitical issue for the EU right now, and especially for Germany, is future relations with China, the Financial Times reported. The two countries do have a lot in common. Both are export-driven economies with large external savings surpluses. But Germany’s economic strategy is not nearly as consistent. The German political preference is to reduce public debt. Yet the country’s biggest problem is falling behind in the technological race.