Germany

Germany's financial regulator warned of serious problems at Hypo Real Estate Holding AG six months before the lender was rescued in a massive bailout, but the regulator lacked powers to act and the government ignored its warnings, according to documents viewed by The Wall Street Journal. The documents--brought to light in preparation for parliamentary committee hearings Thursday to examine the government's handling of Hypo's bailout--are likely to prove politically charged ahead of national elections in September. For months, Germany lectured the U.S.

Germany hasn't reached a decision yet on providing state-backed bridge financing to General Motors Corp.'s Adam Opel GmbH to give the unit more time to clinch a deal with a new investor because the U.S. parent company has come up with a new cash demand, German government officials said early Thursday. A decision over Opel has been delayed to Friday, Economics Minister Karl-Theodor zu Guttenberg told reporters after late night negotiations in Berlin that dragged on into the early hours of Thursday.

The possible insolvency of German department-store operator Arcandor AG could have an impact on a property-investment consortium led by the Whitehall Funds, which owns a 51% stake in a portfolio that includes 85 of the retailer's Karstadt stores as well as other properties, The Wall Street Journal reported. Some of the buildings are among Germany's top retail locations, such as the KaDeWe store in Berlin or the Oberpollinger store in Munich.

Bankruptcy for Opel, the European unit of General Motors, remains a distinct possibility despite three offers for the unit, the German economy minister, Karl-Theodor zu Guttenberg, said in an interview published on Sunday, The New York Times reported. Though Chancellor Angela Merkel’s government is to meet on Monday to consider the bids, there is no guarantee that any will be accepted, Mr. Guttenberg was quoted as saying by Bild am Sonntag. Speaking to journalists in Berlin on Sunday, Mr.

Fiat SpA is convinced it has more than a 50 percent chance of succeeding in its bid for Opel because it does not think the other contenders have the expertise to revive the car maker, Reuters reported on an Italian newspaper story. But General Motors Corp, which is selling Opel, has Fiat at the bottom of a list of three contenders, German magazine Der Spiegel said in its online edition, citing what it described as an internal GM ranking list of the bids.

Cevdet Caner, the man at the center of Germany’s biggest real estate insolvency in 15 years, is fighting eviction from his 20 million pound ($31 million) London townhouse, complete with basement swimming pool, Bloomberg reported. His group of investment companies called Level One owes €1.5 billion ($2 billion) to creditors led by Credit Suisse Group AG, according to estimates by the German administrator. The two main holding companies defaulted and were placed under court administration in August, U.K.

Germany’s voluntary “bad bank” scheme adopted by the cabinet last week is a substantially watered-down version of the original draft, amended because of a parliamentary revolt, the Financial Times has learnt. Berlin was forced to shelve the earlier draft, which would have saddled taxpayers with hundreds of billions of euros in risks associated with toxic assets held by the nation’s banks, because coalition legislators threatened to vote it down.

Fiat SpA Chief Executive Sergio Marchionne has agreed to hold talks with Italian government officials and unions in an effort to avoid labor opposition that could derail his plans to make Fiat one of the world's largest car makers, The Wall Street Journal reported. Italian Industry Minister Claudio Scajola on Friday released excerpts of a letter Mr. Marchionne recently sent the minister, pledging to meet with the Italian government and unions as soon as Fiat knows the outcome of its proposed merger with Opel, the German unit of General Motors Corp.

The German government wants more detailed concepts in the next week from the two rival groups interested in investing in General Motors unit Opel, Economy Minister Karl-Theodor zu Guttenberg said on Thursday, Reuters reported. Guttenberg, speaking to reporters after a meeting of top government officials on the Opel matter, said Berlin wanted Opel assets placed with a trustee in the event that GM filed for bankruptcy before a deal with investors had been concluded. Read more.

In a related story, Bloomberg reported that Germany has allocated enough funds to deal with toxic assets, Finance Minister Peer Steinbrueck said, seeking to tackle the $1 trillion banking crisis without forcing taxpayers to spend more on bailouts in an election year. The government’s Soffin bank-rescue fund has €260 billion ($356 billion) left, with a maximum of €190 billion in toxic assets still on banks’ books, he said. Chancellor Business owners have complained that Steinbrueck stalled as he sought to limit the burden to taxpayers before Sept. 27 national elections.