German department store chain Galeria is not holding back in its insolvency plan: either creditors settle for a pittance, or the chain goes bankrupt and they get nothing at all, Retail Detail reported. Belgian subsidiary Inno may face a surprising twist. On 27 March, Galeria will face its creditors in some cut-throat negotiations: the department store chain is working on a restructuring plan under the protection of the court in Essen, but creditors will have to agree to a hefty debt rescheduling.
Germany
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German inflation surprisingly accelerated in February, further complicating the European Central Bank’s task after overshoots this week in other parts of the continent, Bloomberg News reported. Consumer prices advanced 9.3% from a year ago, up from January’s 9.2% gain, driven by services and food costs. The move came even as Germany moved to limit household heating bills that rocketed because of Russia’s war in Ukraine. The reading for Europe’s biggest economy puts more pressure on the ECB after French inflation hit a euro-era record and Spanish price growth defied estimates to moderate.
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The German economy shrank by 0.4% in last year’s fourth quarter, the national statistics office said Friday, a sharp downward revision from its initial report that gross domestic product declined by 0.2%, the Associated Press reported. The quarter-on-quarter contraction in the October-December period was the first since the first quarter of 2021. Consumer spending, which propped up growth in the first nine months of last year, dropped by 1% in the final three months of 2022. Investment in construction and machinery showed bigger drops in the final quarter, the Federal Statistical Office said.
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Germany’s government is in talks to pay more than €20 billion ($21 billion) for the local unit of power grid operator TenneT Holding BV in a deal that could mark the starting point for a consolidation of the country’s power grids, Bloomberg News reported. Officials are hashing out the structure of a potential deal with Dutch state-controlled TenneT, and negotiations could take several months, according to the people, who asked not to be identified because the information is private. The deal would come on top of an equity need of about €15 billion to upgrade the net.
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Activist investors are renewing their years-long efforts to break up some of Germany's most venerable companies, seeing streamlining as a promising route to reviving share prices as Europe's top economy emerges from the energy crisis, Reuters reported. This week Brenntag, founded in 1874 as an egg trader in Berlin, became the latest target of investors, who called for the chemicals distributor to spin off its specialties unit. Bayer BAYGn.DE, Fresenius FREG.DE and Thyssenkrupp TKAG.DE have seen similar demands to release value.
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An internal review at Deutsche Bank AG found that some employees deliberately circumvented controls to make big profits by mis-selling products, Bloomberg News reported. The probe known as Project Teal showed that some employees on a London-based foreign-exchange desk sold derivatives to small and medium-sized Spanish companies even though they knew that the products were too complex for those clients, according to people familiar with the matter.
The German economy will grow slightly this year, the European Commission said Monday, revising upwards its forecast for Europe's biggest economy which it had previously expected to contract by 0.6%, Reuters reported. In its winter forecasts, the European Commision envisages 0.2% GDP growth for Europe's biggest economy in 2023, more than expected in autumn due to the easing of energy prices and policy support to households and firms. German gross domestic product decreased 0.2% quarter on quarter in adjusted terms in the fourth quarter.
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The German economy unexpectedly shrank in the fourth quarter, data showed on Monday, a sign that Europe's largest economy may be entering a much-predicted recession, though likely a shallower one than originally feared, Reuters reported. Gross domestic product decreased 0.2% quarter on quarter in adjusted terms, the federal statistics office said. A Reuters poll of analysts had forecast the economy would stagnate. In the previous quarter, the German economy grew by an upwardly revised 0.5% versus the previous three months.
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The German government on Wednesday said it expects to eke out economic growth this year instead of a decline as Europe’s largest economy manages its energy divorce from Russia and shells out support for consumers and businesses hit by higher energy costs, the Associated Press reported. The 2023 outlook improved to an 0.2% expansion from a 0.4% contraction that was expected in October, when Germany feared it would run out of natural gas used to power factories, generate electricity and heat homes this winter.
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Jutta Doenges, a former Goldman Sachs Group Inc. banker who also ran Germany’s debt management agency, will take over as chief financial officer of recently nationalized utility Uniper SE, Bloomberg News reported. Doenges will take over on March 1, and replace Tiina Tuomela, whose contract expires, the company said in a statement, confirming an earlier report by Bloomberg. The Dusseldorf-based company suffered massive losses after Russia’s invasion of Ukraine triggered a surge in gas prices, and is in the midst of a management shakeup following a government takeover.
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