Germany

Opel, the German subsidiary of US car maker General Motors, will require European state aid to survive, the head of its works council said Monday amid reports the firm could go under with the loss of 25,000 jobs, Agence France-Presse reported. There will not be a "isolated German solution for Opel," Klaus Franz told Deutschlandfunk radio. "If we find a solution, it will only be a European solution," he added. Opel needs more than €3.3 billion ($4.2 billion) to stay afloat, according to media reports, as auto sales have slumped around the world, especially in Europe.

The German government distanced itself on Monday from any commitment to Opel's future, saying it would wait for the ailing automaker to present a business plan before considering state guarantees. Opel, the German unit of General Motors, needs some €3.3 billion ($4.15 billion) to keep afloat through to the end of 2011, a source at the carmaker told Reuters on Friday.

General Motors's European brands are near collapse, with Germany's Opel in need of substantially more funding and Saab reported to be asking for $590 million from the Swedish government to help it restructure, Reuters reported. Filing for protection from creditors on Friday, Saab said it would present a reorganisation proposal within three weeks while court filings revealed that it estimated its losses in 2008 and 2009 at around 3 billion Swedish crowns ($340.1 million).

General Motors Europe said on Wednesday it was prepared to discuss partnerships or outside investment for its Opel unit as pressure mounted on the government in Berlin to help rescue the German brand, Spiegel Online reported. But Chancellor Angela Merkel said Opel must first present a clear restructuring plan before her government can consider giving assistance. GM Europe's United States parent company on Tuesday night announced plans to reduce its global workforce by 47,000 jobs this year and to cut five additional American plants by 2012.

The German government is set to adopt a law allowing it to temporarily nationalise troubled banks through the seizure of shares, according to a draft text obtained by Agence France-Presse Wednesday. The law is seen paving the way for the total nationalisation of stricken Germany property lender Hypo Real Estate (HRE), which would be the first time in modern German history the state has taken control of a bank. Nationalising banks "is only permissible when there are no other reasonable legal and economic solutions available to safeguard financial market stability," the draft says.

Sakthi Sugars Ltd said on Thursday two of its European units have filed for bankruptcy as required under local laws following an economic slowdown in United States and Europe, which resulted in a drastic reduction in orders, Reuters reported. Sakthi Germany GmbH, a 6th step down subsidiary which operates two plants in the country, and Sakthi Sweden A.B., a 3rd step down unit and a Swedish holding company, have filed for bankruptcy under the laws of the respective countries, it said in a statement to the stock exchange.

Famed German model railway maker Maerklin filed for bankruptcy protection from creditors on Wednesday after it failed to secure new credit from banks, the International Herald Tribune reported. Maerklin Holding GmbH made the bankruptcy filing at a court in Goeppingen, the company's southwestern German home town. The company said that its everyday business would continue unaffected. Maerklin began 150 years ago as a small factory making tin toys and has evolved into an iconic name in the model railway market.

German Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier, her challenger in Sept. 27 elections, failed to resolve a coalition dispute over nationalization of Hypo Real Estate Holding AG, Bloomberg reported. Talks at the chancellery in Berlin Wednesday broke up with Merkel’s Christian Democratic Union and Steinmeier’s Social Democratic Party unable to bridge a divide over how to save Hypo Real, the Munich-based property lender that’s already received €92 billion ($120 billion) in public funds. Merkel’s dilemma over nationalization of banks is echoed internationally. U.K.

The European Central Bank is drawing up guidelines for European governments that are considering "bad banks" to house lenders' toxic assets, while Germany is moving closer to agreeing to legislation that would help its banks set up individual bad banks, The Wall Street Journal reported. The parties in German Chancellor Angela Merkel's coalition have expressed support in recent days for a plan under which Germany's banks would move bad assets off their books.

Germany's Finance Ministry is weighing the nationalization of Hypo Real Estate Holding AG, the Munich bank whose troubles prompted Germany to bail out its entire banking sector last year, The Wall Street Journal reported. No decision has been made, according to a senior German official. But Finance Minister Peer Steinbrück is considering ways to take control of Hypo as a prelude to radically scaling down its operations, this person said. The government could even confiscate shareholders' stakes in the bank, under one option being considered.