Morning Briefing

German Tax-Cut Envy

Eugene Ionesco’s Theater of the Absurd is being played out on the stage of world politics. At the B20 gathering in Berlin today and tomorrow, 2,500 business representatives and demonstrators will try to convince Donald Trump, a veteran capitalist who became president, that trade – wait for it – is good business. “Ideologies separate us. Dreams and anguish bring us together,” Ionesco once said.

Trump’s plans to drastically cut the corporate tax rate on companies, from 35 percent to only 15 percent, have also got the attention of the Federation of German Industries, the BDI. Such cuts in America would be keenly felt by an exporting country like Germany and trigger tax competition. Now German business leaders are clamoring for similar tax cuts to be introduced at home. In effect, firms across the world would stop competing on quality and instead vie for the equivalent of subsidies. Let’s stop this race before it escalates.

Chancellor Angela Merkel is heading to Russian President Vladimir Putin’s summer residence in Sochi today to discuss the G20 summit of world leaders in July. But the pair is likely to moot more prickly topics that are currently straining bilateral relations, including the war in Syria and the Ukraine crisis. Merkel speaks Russian and Putin speaks German but whether this pair can speak the same language remains to be seen.

Apple’s shares are soaring ahead of today’s expected earnings. They might rise even higher this fall, when the world’s most valuable company plans a new product launch to mark the 10th anniversary of the iPhone. A self-driving car, augmented reality specs or a new smartphone, perhaps? One problem Apple has is to decide what to do with its cash hoard of $250 billion. With that kind of money, the Silicon Valley giant could buy up a good chunk of Germany’s corporate sector.

Cash-strapped Alitalia is heading into a financial tailspin ahead of its annual shareholders’ meeting today. That’s bad news for Gulf airline Etihad, which owns a 49-percent stake in the troubled Italian carrier. Catastrophic figures just released by Air Berlin, Etihad’s largest European subsidiary, added to its woes, threatening to bring Etihad down in Europe. Can you fix a bird with two broken wings?

Nico Rosberg’s “office” used to be the cockpit of a Formula 1 Mercedes. But then, to general surprise, he quit while at the top. Dieter Zetsche, the boss of Daimler, empathized with his protégé’s decision, as the two made clear at yesterday’s Handelsblatt Pathfinder conference in Berlin. But what will Rosberg do next? Maybe race for Ferrari, Rosberg joked on the stage with Zetsche. More seriously: Maybe Rosberg’s next cockpit will be an office. Quite a few headhunters might be taking note.

PTScientists, a group of German scientists also attending the Pathfinder conference, have set their aims sky-high. They hope to launch a 14.5-day mission to the site where man last set foot on the moon. That’s one small step for man, one giant leap for the Berlin-based group of scientists, which Vodafone is helping finance. One goal is to make going to the moon “boring” – as boring as taking the bus to work. Then the moon would become a sort of pit stop for farther trips into space. The sky is no longer the limit.

Image of the Day

05-02
Activists wore masks at the traditional May 1 labor day march in Paris depicting the face of Jean-Marie Le Pen, the founder of the French far-right Font National, with the hair of his daughter Marine Le Pen, who is running for president. Source: Gonzalo Fuentes/Reuters
We hope you enjoyed this free article.

Subscribe today and get full access to market-moving news in Europe's leading economy.