Germany

Germany’s economy may be skidding towards recession, the Bundesbank has warned, after it cut its 2013 growth forecast from 1.6 per cent to almost 0.4 per cent, the Irish Times reported. Europe’s largest economy will grow just 0.7 per cent this year, the central bank forecast, with contraction in the fourth quarter and likely stagnation in the first quarter of next year. The bank attributed the slowdown to a growing chill in the country’s important export sector.

For the past year, as Chancellor Angela support has struggled to forge a euro-crisis solution that will pass muster with German voters, Peter Bofinger, a 58-year-old University of Wuerzburg economics professor, has been a leading voice among her economic opposition, Bloomberg Markets reports in its January issue. Where Merkel has preached austerity, Bofinger has called for stimulus; where she has demanded fiscal responsibility from debtor nations, he has pleaded for collective liability among all members of the single European currency.

Some of the loudest objections to EU banking union plans have come from Germany, and particularly from its savings banks, or Sparkassen, which believe they are central to the country’s tradition of strong regional industries, the Financial Times reported. They say home regulators better understand their characteristics and way of doing business.

Germany is standing firm in its opposition to another major write-down of Greece's debt ahead of a meeting Tuesday that aims to clear the way for the next disbursement of aid to Athens. "A haircut remains unimaginable," Finance Ministry spokeswoman Marianne Kothe said at a regular government news conference Monday, as euro-zone finance ministers work to thrash out a deal.

Nervous investors Wednesday paid Germany for the privilege of parking their funds at a bond sale for the first time since July as renewed concerns over Greek finances stoked an appetite for the euro zone's safest securities, The Wall Street Journal reported. Investors are flocking back to German debt as Greece's problems intensify and the positive impact of the European Central Bank's bond-buy pledge starts to fade.

The main donor and the main recipient of European Union subsidies, Germany and Poland differ on the need to cut the bloc’s budget for 2014-2020, their leaders said Wednesday ahead of an EU summit next week, the Emerging Europe blog reported. The bloc’s 27 members will likely struggle at a summit on Nov. 22-23 to agree on a proposed budget of some €1 trillion ($1.3 trillion). Germany and other states that pay more into the bloc than they receive from it would like to cut their contributions, lowering farm subsidies and funds for the less-affluent members. U.K.

German exports slid in September at the fastest pace since late last year, hit by declining demand among its crisis-wracked euro zone trading partners, Reuters reported. Imports also fell, adding to evidence that the crisis is inflicting a heavy toll on the currency bloc's largest economy. The trade figures come after a string of disappointing data for Europe's economic powerhouse. Business sentiment has worsened, the private sector has contracted, joblessness has risen and industrial orders have fallen at their sharpest rate in a year.

German regulator BaFin has asked Deutsche Bank AG and at least 14 other banks to draw up emergency blueprints for restructuring during a crisis, Reuters reported. The plans form part of a global effort by regulators to avoid multi-billion taxpayer bailouts of distressed lenders and prevent any one lender from causing a systemic crisis for the entire financial system. "The aim is to get banks and regulators thinking about emergency plans," BaFin executive Raimund Roeseler said on Friday.

Leading German politicians are rejecting calls for a restructuring of Greek debt that would lead to a direct loss for German taxpayers, but they are keeping the door open to other manners of reducing Greece's unsustainable debt load, including a debt-buyback program, The Wall Street Journal reported. Greece's private-sector lenders, who agreed to take losses on their investments in a massive restructuring of Greek debt, have refused to accept another so-called haircut on their holdings.

German Finance Minister Wolfgang Schaeuble suggested on Wednesday that his country may be prepared to show flexibility on Greece's fulfilment of its bailout terms if there are obstacles that are beyond Greece's control, Reuters reported. Greek Finance Minister Yannis Stournaras said earlier on Wednesday that Athens had been given additional time by the European Union and the International Monetary Fund to implement new austerity measures.