Germany

Germany is considering a plan with its European Union partners to offer Greece and other troubled euro-zone members loan guarantees in an effort to calm fears of a government default and prevent a widening of the credit woes, people familiar with the matter said, The Wall Street Journal reported. EU leaders are expected to discuss the situation at summit in Brussels on Thursday.

General Motors Europe on Tuesday finally announced the details of its plan to restructure German car-maker Opel. In addition to thousands of job cuts, GM wants €2.7 billion from European governments. Opposition to the plan is building in Germany, Spiegel Online reported. GM is asking for €2.7 billion ($3.7 billion) in loans or loan guarantees from countries where Opel factories are located. Germany would be responsible for coming up with €1.5 billion of that amount, with half coming from the federal government in Berlin and the remaining amount being coughed up by the German states concerned.

Group of Seven financial leaders agreed on the need to continue supporting their economies until financial recovery takes a firmer hold, but they have yet to reach a consensus on how to overhaul regulation of their financial sectors, The Wall Street Journal reported. French Finance Minister Christine Lagarde said leaders were unable to make collective decisions on a U.S. proposal to limit proprietary trading at commercial banks, partly because financial institutions in countries including France, Germany and Japan aren't plagued by the same issues as U.S. banks.

German officials said they were weighing fresh offers from informants after deciding last week to pay €2.5 million ($3.4 million) for the names of suspected tax evaders in what is rapidly evolving into a broad attack on Switzerland's system of banking secrecy, The Wall Street Journal reported. Over the past week, German officials have launched a tactical and rhetorical assault on Swiss banking, a strategy that appears to be aimed at undermining both Switzerland's tradition of secrecy and its pre-eminence as a tax refuge.

Many countries have started to see a rebound from last year’s economic recession. But will it last? Economists at the World Economic Forum in Davos warn that paying down massive public debt will be "very, very painful." Deep spending cuts and significant tax hikes may be unavoidable, Spiegel Online reported. For those now in their 30s, Kenneth Rogoff has bad news. "It will be terrible for you," the Harvard University economics professor told a young German at the World Economic Forum in Davos. "Germany's debt is exploding, the population is aging," he said.

Even in an era of bad banking deals, the case of Bayerische Landesbank, a bank based in Munich, stands out, The New York Times reported. Its ill-fated attempt to expand in Eastern Europe has cost Bavarian taxpayers €3.7 billion ($5.4 billion). It has also led to a criminal investigation of the bank’s former chief executive.

The Netherlands, Germany and Austria have all relied heavily on so-called short-work programs to keep people in their jobs in the wake of the financial crisis. All three have managed to keep unemployment from soaring, but the Dutch have been particularly effective, The Wall Street Journal reported. At 3.7% in October, according to the European Union statistics office, the country's jobless rate is one of the lowest among the world's wealthy nations. After the crisis hit, the Dutch government, labor unions and employers quickly reached an agreement to begin payroll subsidies.

The euro tumbled as debt woes spread around the euro zone from Greece, where pledges of austerity and fiscal rigor failed to stem growing fears that the Continent's economic recovery could be derailed, The Wall Street Journal reported. The euro fell as low as $1.4505 on Tuesday, its lowest level since early October. New worries about Austrian banking also roiled markets, with rumors of trouble at an Austrian lender with shaky investments in Eastern Europe following Monday's surprise nationalization of another Austrian bank at the behest of the European Central Bank.

The Airbus military transport plane A400M took off for its maiden flight on Friday in Seville, Spain. But the project is now €5 billion over budget and EADS would like European governments to help cover the shortfall, Spiegel Online reported. Airbus parent EADS is hoping that the governments of seven European countries, which have ordered 180 of the gigantic, military transport aircrafts, will agree to renegotiate the original contract -- one which placed the burden of budget overruns squarely on the shoulders of Airbus.

Germany needs new insolvency requirements to win time and guard itself against any failure of systemically relevant banks, Deutsche Bundesbank President Axel Weber said Thursday, Nasdaq.com reported on a Dow Jones story. One of the things currently discussed would be more stringent capital requirements for systemically relevant banks, Weber said, with a view to pending international agreements. Commenting on money market developments, he said he doesn't share the view that the market place for banks' liquidity provisions will return to business as usual after the global financial crisis.