Germany

The stress test conducted on nationalized German lender Hypo Real Estate uncovered a possible capital shortfall of €2 billion ($2.59 billion) under adverse circumstances, people familiar with the matter said Tuesday, The Wall Street Journal reported. Hypo Real Estate is thus the first bank to appear to fail a test of its soundness conducted by the Committee of European Banking Supervisors, which also is reviewing the health of 90 other major banks. However, analysts said the result is far from surprising and says little about how the overall process will play out.

The representatives of potential Karstadt investor Nicholas Berggruen and Germany's Valovis Bank said Tuesday they have agreed on the conditions for a rental agreement over 53 Karstadt properties, further paving the path for Berggruens takeover of Karstadt following weeks of negotiations, Dow Jones Newswires reported. Now there is agreement on all essential points of the rental contract, Berggruen Holdings and Valovis said.

Germany's economy is growing. Global exports are booming. The euro is recovering. What's not to like? Plenty, according to a survey of German banks. Fully 60 percent fear that the euro crisis will worsen and jeopardize economic growth, Spiegel Online reported. According to the semi-annual "Bank Barometer" survey carried out by Ernst & Young in Germany, which was released on Thursday, only 39 percent of the 120 banks surveyed feel that the situation on the financial markets will improve in the next six months. In December, 65 percent thought it would.

Bankrupt German aluminum maker Almatis BV is considering a new refinancing proposal from its owner Dubai International Capital LLC, but Almatis senior debtholder Oaktree Capital Management urged the judge to stick to the original reorganization plan, Reuters reported. In a letter dated Wednesday to Judge Martin Glenn, who is overseeing the case, Almatis' attorney said he had received a proposal from Dubai International Capital, or DIC, to pay off the company's senior debt in full.

A group of bondholders representing the debt of insolvent German retailer Karstadt's properties has called a special meeting in London for July 28 to discuss some of the terms of the takeover offer for Karstadt proposed by billionaire investor Nicholas Berggruen, according to a notice from the group reviewed by Dow Jones.

Chancellor Angela Merkel roundly rebuffed U.S. President Barack Obama's call for Germans to aid the global recovery by spending more and relying less on exports, even as she warned that Europe's own financial crisis is far from over. In an interview with The Wall Street Journal in her Berlin chancellery, an unapologetic Ms. Merkel said the nations that share the beleaguered euro have merely bought some time to fix the flaws in their monetary union.

The chief executive of General Motors Co.'s Adam Opel GmbH division, Nick Reilly, said he wants to complete almost all of the planned restructuring measures by the end of this year in a bid to turn around the business as soon as possible, Dow Jones reported. Thanks to the revamped Meriva and Astra models, Opel's market share in the second half of the year is expected to rise to slightly more than 9% from currently just under 9%, Reilly said.

Bank levies and a global transaction tax: those two items will be at the top of German Chancellor Angela Merkel's wish list when she travels to Toronto this weekend for the G-20 summit, Spiegel Online reported. With the economy on the slow road to health, so goes her logic, it is time to introduce far-reaching reforms of the global financial system. Opposition to her reform proposals is widespread and, more ominously, frustration is building with Germany's new focus on budget consolidation and debt reduction.

Germany wants to see the results of stress tests for banks in the European Union to be made public in an effort to restore market confidence, a finance ministry official said Thursday, the Associated Press reported. The comment marks a turn-about in Germany's position - previously it had opposed publication of the tests checking the banks' stability, citing fears the results could spook investors.

Car parts supplier Vorwerk Autotec has renewed its interest in insolvent German peer Karmann's roof business, having lost out in a previous auction earlier this year, Reuters reported. Previously, at least four suitors were in the race for the insolvent company, including Vorwerk Autotec, financial group Nordwind Capital, Canada's Magna International and CIE Automotive. In May Magna's leading bid was blocked by German competition authorities.