Germany

Germany's economy minister was quoted as saying Saturday that questions remain over plans by both Fiat SpA and auto parts maker Magna International Inc. to invest in General Motors' main European unit, Opel, and stressed that he is equally open to both suitors, the Associated Press reported. Fiat's chief executive, Sergio Marchionne, has visited Germany twice in the past week to present officials his plan to make GM Europe, including German-based Adam Opel GmbH, part of a global powerhouse also including Chrysler.

In Spain, when the previous finance minister said there was no room for tax cuts or spending to buoy the economy, he was sacked by the prime minister. "There is room--there can't not be," new finance minister Elena Salgado said last week, in the face of a Europe-high 17% unemployment rate. But in the U.K., France and Italy, gaping budget deficits have largely ended the chance of major new tax cuts or spending . Germany says that despite expecting a 6% dive in its economy this year, it is more worried about stoking inflation in 2010.

Italian car maker Fiat SpA is in talks to buy a stake in General Motors Corp.'s German-based unit Adam Opel GmbH as part of a wide-ranging strategy to become one of the world's largest auto makers, according to people familiar with the matter. Fiat Chief Executive Sergio Marchionne held talks in Berlin last week with German Economy Minister Karl-Theodor zu Guttenberg, who is leading the German government's search for a new investor in Opel, one person said.

Russian billionaire Alexander Lebedev said his Blue Wings AG airline in Germany is planning to file for bankruptcy after the discount carrier’s flight license was revoked, Bloomberg reported. “I will probably file for bankruptcy and will try to make a point that it is the German government’s fault,” Lebedev said today in an interview with Bloomberg Television.

German department store chain DWW Woolworth GmbH Co, owned by British investor Argyll Partners, has filed for insolvency, a court said on Tuesday. Slowing sales, increased competition, and insufficient liquidity are believed to have contributed to the company's collapse, Sky News reported. Business at its roughly German and Austrian stores would continue as usual, with the Austrian and logistics operations not believed to affected by the filing. Woolworth employs about 9,000 staff in Germany and generated about €900 million ($1.2 billion) in sales in its fiscal year to end-October 2008.

The ripple effects of American International Group Inc.'s woes have spread from the bastions of global finance to U.S. transit authorities to little towns throughout Germany, The Wall Street Journal reported. The reach can be chalked up in part to a kind of infrastructure tax deal that gained popularity in the 1990s and spread among hundreds of municipal and state governments around the world. Now, the deals in many cases have backfired because of the giant insurer's problems. The notion was this: Localities could earn millions of dollars selling their infrastructure to U.S.

The world could face high inflation and a “crisis after the crisis” when the global economy recovers, Peer Steinbrück, German finance minister, has warned, the Financial Times reported. The comments, in a weekend interview, are the latest sign of concern from Germany at the extra-loose monetary policies conducted by central banks around the world and the ever-larger fiscal stimuli being unveiled by governments.

Caja Madrid may be the first Spanish bank to stop interest payments to mortgage-backed bond investors as loan defaults soar, according to Standard & Poor’s. Homeowners lagged behind on repayments on 72 billion euros of mortgages as of January, Bank of Spain data show, after the credit crisis halted a real-estate boom. “A number of deals” may have to defer interest, said Dipesh Mehta, an asset-backed debt analyst at Barclays Capital in London. “Unemployment is the biggest risk” to Spanish mortgage bonds, he said.

Qimonda, the insolvent German memory-chip maker, yesterday entered formal bankruptcy proceedings as its search for an investor dragged on, the Financial Times reported. The company said 915 of just under 3,400 employees would keep their jobs as it shuttered more sites--including its main plant in Dresden. Michael Jaffé, the insolvency administrator, said he remained in talks with "potential interested parties", and with governments in Germany and Portugal about supporting any new owner.

German Chancellor Angela Merkel may be losing valuable time that General Motors Corp.’s Opel business doesn’t have as she holds out against taking a stake in the unit. Merkel says U.S. President Barack Obama’s rejection of GM’s recovery plan gives European leaders a 60-day breathing space to help save Germany-based Opel. Unions and analysts say governments need to take control of the division now or risk it falling victim to a restructuring focused on the U.S. business.