Germany

Before talking about Germany’s role in Europe we must first determine the pillars on which a strong and lasting leadership is built. Economic strength is essential, but alone it is not enough for a state to extend its sphere of influence, the Financial Times reported in a commentary. Germany may be Europe’s economic engine, but the country lacks both hard and soft power, the cornerstones of true leadership. The 20th century would not have been the American Century if the US hadn’t increased its military presence and exported its way of life worldwide.

The German government has said it still expects the 150 million-euro ($175 million) loan granted to Air Berlin to be repaid in full, after a court opened formal insolvency proceedings against the carrier on Wednesday, Reuters reported. The loan granted in August had kept Air Berlin planes in the air while administrators held talks with prospective buyers of the airline’s assets. “The loan of 150 million euros will be repaid from the proceeds of asset sales,” a spokeswoman for the economy ministry said on Thursday.

Prices in Germany unexpectedly slipped this month, highlighting the challenges facing the European Central Bank as it attempts to roll back monetary stimulus without reversing the recent uptick in inflation, the Financial Times reported. Consumer prices fell an average of 0.1 per cent over the month, compared to expectations that they would stay steady. The monthly decline brought the year on year inflation rate down from 1.8 per cent to 1.5 per cent, confirming earlier state-level readings that had suggested a pullback.

Air Berlin is in talks with Thomas Cook airline Condor, as well as Britain’s easyJet over the sale of some of its remaining assets, as time runs out for a deal to be done, a source familiar with the matter said on Tuesday. Air Berlin had been in exclusive talks with Lufthansa and easyjet, but while a deal was agreed with Lufthansa for large parts of its business, talks with easyJet continued over the weekend, Reuters reported. “Air Berlin is in talks with two bidders - easyjet and Condor. The race is wide open,” the source said.

Lufthansa reinforced its position as Germany’s largest airline on Thursday by signing a 210 million euro ($249 million) deal to buy large parts of insolvent Air Berlin, Reuters reported. Lufthansa plans to use the Air Berlin assets to quickly expand its Eurowings budget business. News of the deal pushed Lufthansa shares up more than 3 percent to their highest level in nearly 17 years. Air Berlin, which has struggled to turn a profit over the last decade, filed for insolvency on Aug.

Lufthansa is poised to agree a deal to buy assets from insolvent Air Berlin, a person familiar with the matter told Reuters, ahead of a deadline on Thursday, Reuters reported. Germany’s largest airline is set to buy Air Berlin’s Niki leisure unit, its LG Walter regional airline and some additional short-haul aircraft, the source said on Wednesday. “The deal with Lufthansa is done, there is agreement,” the person said, adding that no contract had been signed yet.

Berlin has quickly rejected plans by Brussels to revive talks on a eurozone bank deposit guarantee scheme, in a sign of how hard it will be to win German backing for further steps to pool responsibility for the bloc’s financial system. The European Commission on Wednesday proposed compromises aimed at ending two years of deadlock over the plans for a European Deposit Insurance Scheme, or EDIS. The plans have strong support from Paris and southern Europe but are viewed with deep misgivings in Germany, the Financial Times reported.

Flights operated by insolvent German carrier Air Berlin will end by Oct. 28 at the latest, it said on Monday, urging staff to seek jobs elsewhere while it works toward a carve-up of its assets. Air Berlin filed for insolvency in August and a government loan is keeping its planes in the air to give it time to negotiate with investors for parts of the business, Reuters reported. Talks with Lufthansa and easyJet are due to run until Thursday and once a deal for parts of its business has been agreed Air Berlin will have to wind down the rest of the operation.

Deutsche Bank AG needs to find extra collateral to remain a counterparty for top-rated asset-backed debt that’s tied to anything from mortgages to car loans, according to Fitch Ratings. The bank’s credit rating, which Fitch downgraded last week, is no longer sufficient for AAA structured notes and Deutsche Bank needs to put up additional collateral for some notes within 14 days, according to a statement on Tuesday, Bloomberg News reported. The lender has already decided to do so in one transaction backed by Dutch mortgages, according to a separate statement.

Lufthansa is restarting long-haul flights from Berlin and growing the long-haul fleet of budget unit Eurowings, moving into the gap left by insolvent rival Air Berlin, Reuters reported. Lufthansa will fly from Berlin to New York from November, basing a long-haul jet in the German capital for the first time since 2001, it said on Wednesday. It will also increase the long-haul fleet of Eurowings to 10 A330 aircraft for summer 2018, against a planned seven by the end of this year. Air Berlin, which filed for insolvency in August, will end its remaining long-haul routes from Oct.