End of an era

Merkel’s impossible EU summit

In Brussels on Sunday and next week, Angela Merkel will face tests that seem insuperable. And they‘re just prologue to a domestic crisis that could topple her.

News Bites

US President Donald Trump threatened a 20% tariff on all car imports from the European Union if EU “tariffs and trade barriers” are not removed.

Dutch finance minister Wopke Hoekstra said he’s against the Franco-German proposal for a common euro-zone budget. He said it’s unclear what problems the move would solve. (ZDF)

Apart from the Netherlands, Austria and Finland are among 12 governments questioning the need for any joint euro-zone “fiscal capacity,” challenging a central tenet of French President Emmanuel Macron’s vision for a euro-zone budget. (Financial Times)

Italy is impounding a Dutch-flagged rescue ship carrying 226 migrants after the Netherlands denied responsibility for the vessel. It’s operated by Mission Lifeline, a German NGO.

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Lufthansa canceled around 2,800 flights in the first half of 2018 – more than all of last year – due to strikes by air-traffic controllers, security bottlenecks and bad weather.

Joachim Wuermeling, a Bundesbank council member, urged the European Central Bank to hasten a reduction of banks’ massive holdings of problem loans. He said €721 billion of these credits were still outstanding in the EU, down about one-quarter since 2015. (Reuters)

German financial watchdog BaFin accused investment firm Deutsche Beteiligungs AG of violating accounting rules, by understating a profits drop in 2017/18. The stock fell 2% on the news.

Police evacuated Cologne’s cathedral for three hours on Friday morning after a man was suspected of planting a bomb. A search with sniffer dogs revealed no trace of explosives and the cathedral was reopened. (Frankfurter Rundschau)

German trade union Ver.di vowed to fight T-Systems’ plans to cut around 10,000 jobs worldwide in the next three years. Some 6,000 of those positions are in Germany. (Reuters)

Horst Seehofer warned Angela Merkel against firing him as Germany’s interior minister. Mr. Seehofer, embroiled in a cross-party feud with the chancellor over migration, said she should dissolve the ruling coalition if she’s unhappy with his work. (Passauer Neue Presse)

Berlin still hopes to reach an amicable solution in the trade dispute with America despite the EU’s implementation of punitive tariffs on US goods Friday. (Reuters)

The body of a missing German hitchhiker was found at a service station in Spain’s Basque Country, according to Spanish media reports. Sophia L., a 28-year-old medical student, was last seen June 14 thumbing for rides in Leipzig.

Some 43% of Germans want Angela Merkel to resign, according to a YouGov survey of more than 2,000 people. Almost as many respondents – 42% – want the chancellor to stay in office. Ms. Merkel is least popular with voters of the far-right AfD, of whom only 6% want her to stay on.

Severin Schwan, CEO of Swiss pharmaceutical giant Roche, remains Europe’s best-paid executive with an annual salary of €13 million. (Reuters)

German publications Bild am Sonntag and Auto Bild will not award their “Golden Steering Wheel” automotive prize this year, due to developments in the industry’s emissions-cheating scandal.

The Handelsblatt Research Institute cut its German growth forecasts for 2018 and 2019 to 1.9% and 1.4% respectively, from 2.5% and 1.8%. HRI President Bert Rürup said the recovery has peaked and that more downward revisions are likely if the trade dispute escalates.

Euro-zone finance ministers have reached a new debt-relief deal for Greece. They extended maturities and deferred interest on a big part of loans to Athens, which will get an extra €15 billion injection when its bailout program ends in August.

Berlin meal-kit startup Delivery Hero has sold Foodarena, its Swiss unit, to Dutch rival Takeaway.com for an undisclosed sum.

Germany’s economy unexpectedly rebounded in June thanks to demand for services, according to a survey of 800 businesses by analytics firm IHS Markit. Its monthly purchasing managers’ index rose 0.8 point to 54.2, the first increase since January despite a cooling in German exports.

IHS Markit also said its June purchasing managers’ index for the euro zone rose to a four-month high, based on a survey of 4,000 firms.

Germans bought more Harley-Davidson motorcycles before retaliatory EU tariffs on US goods went into effect Friday. Some 5,675 Harleys were sold in the country from January to May, a rise of 19% from 2017. (WirtschaftsWoche)

Credit ratings agency Fitch revised its outlook for Deutsche Bank from stable to negative amid concerns about the lender’s restructuring and strategy.

News gallery

In case you missed it

That jacket Melania wore, Seehofer as a prince, two cats in their birthday suits and two Germans in NBA garb.

Services shakeup

T-Systems cuts a quarter of workforce

Deutsche Telekom’s IT services subsidiary will cut 10,000 jobs worldwide, in a bid to change its sclerotic organization culture and end a decade of losses. Labor unions are not happy.

Masters of the universe

Hedge funds scale learning curve in Germany to recast industry

Activist investors have finally figured out how companies work in Germany and now, armed with cash, they're transforming the corporate landscape.

Data Drama

Teradata sues SAP for trade secret theft on data analytics product

US company Teradata says German software giant SAP used a joint venture to steal secrets later used in developing its core HANA product.

Editors’ Pick

Pricing Snippets

EU copyright decision could change the internet’s sharing culture

EU lawmakers are about to make a landmark decision on copyright reforms that some critics see as an assault on the internet.

Dive In

Daily briefing

Spoiler alert on Sunday’s migration summit

While Bavarians are in a snit about Mercron, everyone else is fretting about football. Here’s our Daily Briefing for June 21st, 2018, with the latest on bees.

News gallery

In case you missed it

Von Storch on BBC, von der Leyen in D.C., poisoned drinking water and the Germans' biggest worries.

Bad news bearish

Deutsche Bank stressing out about US stress tests

Germany’s largest bank seems doomed to fail the review by US regulators, causing further damage to its reputation and loss of key personnel.

Equity Tokens

Blockchain startup Neufund to debut equity token offerings

Berlin-based blockchain startup Neufund wants to revolutionize the way companies raise money but it may fall afoul of German banking regulations.

‘Mini summit’

Juncker’s bid to rescue Merkel

The EU Commission chief will host a “mini summit” Sunday in an attempt to forge a European deal to curb migration. Without real progress, Angela Merkel, facing a revolt in her coalition, may topple.

defending defense

Arms exports booming, triggering debate

German weapons exports remained high last year despite plans to reduce sales to countries outside the EU and NATO. Arms manufacturers say such deals have been vital to them due to sluggish European spending.

Daily briefing

Europe has a serious shortage of heroes on migration

Meet Berlin's new ambassador in Washington, DC – and speaking of tough jobs, who's going to take on Audi? Here's our Daily Briefing for June 20th, 2018 and it includes some animal rescue.

Can’t please everyone

Merkel-Macron EU deal makes Paris happy but angers Bavarian allies

The Franco-German compromise may break the EU’s deadlock on asylum and euro-zone reform. But it spells even more trouble at home for the chancellor, given the resistance of the CSU’s conservative hardliners.

Thwarted plot

First planned biological bomb attack on Germany confirmed

Alarm bells are ringing in Germany after security officials learned more about a Tunisian's efforts to create ricin and use the deadly substance for a terrorist attack.

Jailhouse blues

Audi CEO to testify to German prosecutors on Dieselgate

Audi's CEO Rupert Stadler is “ready to talk” after being arrested in connection with the emissions-cheating scandal. Meanwhile, the company's executive board is deliberating his replacement.

Bend it like Beckenbauer

The German World Cup squad shows a country lost in transition

Since 1954, German soccer has mirrored and tracked the state of Germany as a whole. And right now, that is cause for worry, Handelsblatt’s senior international correspondent muses.

shuttle diplomacy

Germany’s new envoy to US has her work cut out for her

Emily Haber is a seasoned diplomat and ready to take on the escalating tensions between Washington and Berlin.

Ask a German

Handelsblatt explains

Much about Germany is confusing or surprising to foreigners - and even to Germans. Our editors provide clarity.

Keep the money flowing

A German ‘Iran Bank’ could save the nuclear deal

Creating a private German Iran Bank would keep investment flowing into Iran, so that Tehran sticks to its side of the nuclear deal. The bank could even be named Deutsche.

Taper but no tantrum

Draghi has barbed words for Germany as ECB sets end to asset purchases

ECB President Mario Draghi surprised some by announcing an end to the bank's bond-buying program in 2018, though he plans to leave interest rates unchanged through summer 2019. Now it's up to governments to pick up the slack.

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