Germany

The German government may be willing to finance a restructuring of Adam Opel GmbH to avoid an insolvency of the troubled General Motors Co. European unit, The Deal Pipeline reported. Berlin has not yet been asked but might be willing to finance a GM-led restructuring after general elections Sept. 27, Financial Times Deutschland wrote. Germany might also reportedly be willing to support a controversial offer for Opel from Brussels financial investor RHJ International SA if it promises to only hold the company temporarily or if it teams with a major auto manufacturer.

The German government might drop its opposition to Belgian-based financial investor RHJ International as a buyer for General Motors' European unit Opel, Bild newspaper reported on Thursday. Berlin could be willing to accept RHJ if it teamed up with an international partner from the car industry, the mass-selling daily said, without saying where it obtained the information. The German government had so far favored Canadian car-parts supplier Magna over RHJ, which aims to shrink the carmaker to return it to profit.

General Motors Co. is now considering whether it should retain its Opel and Vauxhall operations in Europe, a strategic reversal that raises new questions about the struggling car maker's direction and creates complications with the governments of Germany and Russia, The Wall Street Journal reported.

General Motors Co is considering a plan to raise funding to keep Opel as an alternative to selling the unit to Magna International, sources with knowledge of the deliberations said on Monday, Reuters reported. The development comes against a backdrop of escalating labor tensions and political stakes over GM's slow-moving effort to sell control of Opel and its British affiliate, Vauxhall. The Obama administration pledged on Monday to stay out of GM's choice of a buyer for Opel, while union leaders in Germany put more pressure on the U.S. automaker to make a decision.

The German government isn't planning a new car-incentive program to replace its €5 billion ($7.2 billion) cash-for-clunkers scheme, which runs out later this year, government spokesman Ulrich Wilhelm said Monday, The Wall Street Journal reported. He was speaking after local newspaper Handelsblatt reported that the ruling government's grand coalition parties are working on a replacement for the car-incentive program, spurred by fears that car makers and suppliers will suffer when the program ends.

The German government has earned about €300 million from its rescue of the country’s banks, according to a finance ministry estimate that could rekindle the debate about Berlin’s strategy in managing the financial crisis, the Financial Times reported. The ministry told the Financial Times that the government and Soffin, the agency that manages Germany’s €500 billion bank rescue fund, had so far earned about €300 million ($430 million, £260 million) in fees for credit guarantees granted to cash-starved banks at the height of the crisis.

Emergency growth-stimulating policies are still needed to support continental Europe’s fragile economic recovery, even though Germany and France have emerged from recession, a top European Central Bank policymaker has warned. Axel Weber, Germany’s Bundesbank president, made it clear he would not rush to withdraw the extensive measures taken by governments and the ECB – which he said had helped the recent improvement in economic performance in Germany, the Financial Times reported.

Britain was left lagging behind Germany and France today as Europe's two biggest economies officially came out of recession for the first time in a year, The Daily Mail reported. The French and German economies both grew by 0.3 per cent in the second quarter of this year, surprising economists who had expected to see a 0.3 per cent fall.

Plans are being drawn up in Germany to allow banks threatened with bankruptcy to be put into receivership administered by the state, according to the draft of a bill obtained by the daily Süddeutsche Zeitung, The New York Times DealBook blog reported. The measures would discourage banks from engaging in the riskiest activities on the assumption that public money would bail them out in times of crisis, the newspaper cited the draft as saying.

A consortium of bidders for Opel led by Magna International will make a new offer for the German carmaker on Monday which includes a demand for rights to Opel’s intellectual property, a Russian newspaper reported. Citing a single source, the Russian daily Kommersant said the consortium, which includes Russian state bank Sberbank, would make the new offer “in the form of an ultimatum” and leave the talks if it was not accepted, The New York Times DealBook blog reported.