As property prices in Germany’s big cities continue to climb, the country’s central bank last month added its voice to a chorus of concern about the prospect of a bubble. While it avoided using that word, the Bundesbank’s February report noted that housing in German towns and cities — Europe’s biggest residential market by value — was overpriced by 15-30 per cent, the Financial Times reported. The German property research group Empirica suggested last month that prices could fall by between a third and a quarter in Berlin, Munich and Stuttgart over the next five years.
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Creditors of insolvent German airline Air Berlin are considering whether to sue its major shareholder Etihad for billions of euros in damages, a spokesperson for the airline's insolvency administrator, Lucas Floether, says. The creditors' committee is scheduled to meet on Monday to discuss putting the claim forward. German newspaper Sueddeutsche Zeitung reported that Floether expected the airline to demand either 1 billion or several billion euros in damages, depending on whether the claim came from Holding Air Berlin or its subsidiary, Air Berlin Luftverkehrs KG.
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Deutsche Bank AG plans to return to a corner of the credit derivatives market that it largely exited about three years ago, according to people with knowledge of the matter. The German lender told clients that it plans to start making markets in some credit-default swaps tied to individual companies, said the people, who asked not to be identified because the information isn’t public, Bloomberg News reported. The bank will buy and sell contracts that settle through a clearing house and plans to start as early as the second quarter, they said.
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For German businessman Ralf Schlesselmann, these are heady times. “We’re totally maxing out,” he says. Mr Schlesselmann runs a 100-year-old family-owned wooden-pallet maker in Asendorf near Hanover that is working almost round the clock to cope with surging orders, the Financial Times reported. “We’re seeing increased demand from all sectors,” he says. “We’re at very close to full capacity.” The humble wooden pallet is an unremarkable thing.
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Unsecured creditors of the failed airline Air Berlin should not expect to recover any of their claims, according to an insolvency report on Wednesday. The report, written by insolvency manager and administrators Lucas Floether and Frank Kebekus, said any remaining hope for creditors to recover assets evaporated after Lufthansa scrapped plans to buy Air Berlin's Niki unit for 189 million euros (£165 million), the International New York Times reported on a Reuters story.
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Few countries attract as much disdain from economists as Germany. Berlin is accused of running an excessively prudent budget and German companies of paying their workers too little: This stinginess -- so the accusation goes -- has contributed to global instability by making it harder for Germany’s euro-zone partners to climb their way out of the crisis, a Bloomberg View reported.
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The German administrator of insolvent airline Niki said he still wanted to sell the leisure carrier to British Airways parent IAG, despite a battle between Austria and Germany over where insolvency proceedings should be handled, Reuters reported. An Austrian court ruled on Friday that the insolvency proceedings should be held there, throwing the deal to sell Niki into doubt.
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Germany’s economic outlook is good. So good that corporate dealmakers have reason to be worried. Europe’s largest economy is in the midst of an economic upswing, which by some measures kicked off almost 15 years ago and is already “the longest since the late 1960s”, as Stefan Kreuzkamp, chief investment officer of Deutsche Asset Management, puts it. Last year was the fourth in a row that Germany recorded growth far higher than the country’s long-term potential, which Bundesbank estimates at about 1 per cent, the Financial Times reported in a commentary.
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Brexit is a once-in-a-lifetime opportunity for Frankfurt to try to lure global banks away from London — but do not expect Germany’s main financial regulator to be part of a heavy sales pitch. “We are not a marketing agency and not interested in doing industrial policy,” says Felix Hufeld, the president of BaFin, which oversees 1,740 banks in the eurozone’s largest economy.
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A Berlin court on Thursday rebuffed a legal challenge to the insolvency filing of airline Niki, which could derail the sale of the Air Berlin unit to Britain’s IAG, and referred the case to a higher court for a ruling, Reuters reported. Niki filed for insolvency in Berlin last month after Germany’s Lufthansa scrapped plans to buy the Austrian unit, grounding the airline’s fleet and stranding thousands of passengers.
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