Germany

Blackstone tabled a debt restructuring plan for German outdoor brand Jack Wolfskin before a lender call on Wednesday, sources close to the situation said, as the company's earnings remain under pressure. Under the terms of Blackstone’s proposal €150m of Jack Wolfskin's circa €300m (255 million pound) debt will be reinstated – although it is unclear on what terms - leaving lenders to take a haircut of around 50%, the International New York Times reported on a Reuters story.

The premium investors are demanding to hold French over German 10-year debt has been given a fresh kick higher in the last few minutes after Francois Fillon said he would not take himself out of the running to be the country’s next president, the Financial Times reported. France’s 10-year yield gap with Germany – a measure of perceived riskiness of its debt – is now at its highest level since November 2012, swelling to 76 basis points and the widest margin since the immediate aftermath of the eurozone’s debt crisis.

European Central Bank President Mario Draghi heaped praise on Germany on Thursday for demonstrating how countries can succeed within the currency union, and urged other eurozone governments to follow Berlin’s example, The Wall Street Journal reported. “When countries do pursue the right policies, the euro is no hindrance to success,” Mr. Draghi said Thursday at an event in Slovenia’s capital city, Ljubljana, to mark the 10th anniversary of that country’s adoption of the euro.

The drop in French government bonds has accelerated this morning, pushing the premium investors demand to hold its bonds over Germany’s to the highest in three years, as the favourite for the country’s presidency is hit by a swirl of allegations over payments made to his family, the Financial Times reported.

The premium investors demand to own two-year French debt over similarly maturing German bonds climbed to its highest level since the 2013 Taper Tantrum on Monday, as the country’s election looms, the Financial Times reported. The difference between yields on two-year French and German sovereign bonds climbed to 25 basis points on Monday, up from 18.5 bps on Friday and a low of less than 1 bp touched after the US election last November. Yields on the French note climbed 5 bps on Monday, compared to a 2 bp drop in German ones.

A sell-off in eurozone government bonds has left German yields at their highest level in a year, challenging investors who have long become accustomed to low inflation and weak economies keeping market interest rates at record low levels, the Financial Times reported. In France, Germany, Italy, Spain and Austria bond yields have broken through 12-month highs as investors focus on the accelerating pace of inflation, grapple with extra supply and question the longevity of the aggressive central bank stimulus that has dominated fixed-income markets.

Reducing debt in 2017 may be the best course of action for SAP SE, The Wall Street Journal reported. The German software maker is not under much pressure to repurchase shares and make acquisitions, analysts say. Finance chief Luka Mucic told analysts on a conference call Tuesday that share repurchases are an option in the second half of the year, depending on the company’s cash position. Free cash flow increased 21% year-over-year to €3.63 billion ($3.89 billion). Net liquidity improved by almost €2.5 billion or 44% in 2016, Mr. Mucic said. Mark Moerdler, an analyst at Sanford C.

Germany’s largest bank said on Wednesday that it would “substantially limit” bonuses for the 2016 financial year. The announcement comes after it agreed in December to pay $7.2 billion to resolve an investigation by American authorities into its sale of toxic mortgage securities, the International New York Times DealBook blog reported. Concerns about the potential size of the settlement have weighed heavily on the bank’s stock price and its reputation.

A leading German industry chief has warned the UK against expecting any softening of Berlin’s increasingly tough stance on Britain’s plans to leave the EU, the Financial Times reported. Dieter Kempf, who took over this month as president of the BDI, the German employers’ federation, told journalists on Tuesday there could be no question of Europe bowing to British demands for immigration controls, saying the EU’s four freedoms — including the freedom of movement — must not be “put into danger”.

German inflation jumped to within a whisker of the European Central Bank target in December, hitting the highest level in more than three years and providing the euro zone bank with evidence its loose monetary policy is working, Reuters reported. The surprisingly strong surge in consumer prices, however, may put a damper on Germans' appetite for shopping as higher inflation means consumers have less real income to spend.