The German arm of EY, one of the world's Big Four accounting firms, has been fined 500,000 euros ($544,630) after acting as the auditor for collapsed payments company Wirecard and barred from auditing certain kinds of companies for two years, ABC News reported. Germany's APAS accounting oversight body said it imposed the fine for breach of professional duty in auditing Wirecard from 2016-18. It said the decision can be appealed in court, and while it bars the auditor from taking on new companies “of public interest,” it does not prevent it from servicing existing clients.
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German retirees' pensions will rise significantly this summer for the second consecutive year, the government said Monday, though the increase will still fall short of the current inflation rate, the Associated Press reported. The Labor Ministry said pensions will increase by 4.39% in the former West Germany on July 1 and by 5.86% in the formerly communist east. That will follow increases last year of 5.35% in the west and 6.12% in the east. Rises in German pensions are linked largely to wage developments.
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Germany's last major department store chain aims to close two-fifths of its branches, months after it filed for insolvency protection for the second time in less than three years, the company's employee council said Monday, the Associated Press reported. The long-troubled Galeria Karstadt Kaufhof plans to shut 52 of its current 129 stores, the council said. It added that the move would cost more than 5,000 jobs, German news agency dpa reported.
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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.
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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