Morning Briefing

Schulz-Mania: Fact and Fiction

 

European Parliament President Martin Schulz’s face is all over the newspapers today. He plans to swap Brussels for Berlin and you’d think it was the second coming. Now this man – who’s practically unknown, doesn’t have a traditional high school diploma, has no government experience and no major accomplishments – is suddenly a potential chancellor. It’s a great example of post-truth personnel policy. Meanwhile, as his star shoots into the stratosphere, Schulz probably feels like he’s going to be the next pope. Well, at least he can speak Italian and Spanish.

Bundesbank President Jens Weidmann takes a dim view of the ECB’s loose monetary policies. He told Handelsblatt: “The enthusiasm for (fiscal) reform that was still discernible at the height of the crisis has indeed waned. In many cases, the relief provided by low interest rates was not used to consolidate government budgets more quickly, but to increase spending. At the same time, the rules designed to ensure sound fiscal policy have lost more and more of their binding effect.“ You’ll find his reasoned appeal for a change in monetary policy in our exclusive interview by Daniel Schäfer and Sven Afhüppe. It’s mandatory reading for European leaders considering who will succeed ECB President Mario Draghi.

The parliamentary floor leader of the Christian Democrats, Volker Kauder, is promising to get rid of the solidarity tax, the reunification-era surcharge to rebuild former East Germany, in an interview with Handelsblatt. Yes, it would be great to abolish the levy introduced in 1995 – but we’ve heard this promise before. Why wait until after the next election, as Kauder is proposing? Just do it now. Actions speak louder than words.

But for shareholders at least, 2017 will be a good year. For the first time ever, companies listed on Germany’s blue-chip DAX Index are planning to pay dividends totaling more than €30 billion. According to Handelsblatt’s calculations, that’s 6 percent more than for 2016, based on nine-month figures and full-year forecasts. As we prepare to deck the halls with boughs of holly, maybe we should paper them with stock certificates instead – we could help save a few bushes and boost the holiday cheer.

And while we’re at it, maybe we should just ratchet down our China-phobia a bit, urges the most powerful woman in China. In an exclusive interview, Vice Premier Liu Yandong said fear of her country’s rising economic clout is overblown. China accounts for less than 1 percent of foreign investment in Germany, while German companies have invested significantly more in the People’s Republic. The greater the economic cooperation, the more benefits for everyone – including people in Germany, she said. “When investment between China and Germany becomes more balanced and more diversified, the economic cooperation between both countries will only bring more advantages.” In other words, more is more.

The Lufthansa pilots’ trade union Cockpit now wants to extend this week’s strike into Saturday. They’re refusing offers to arbitrate – but there’s no way out: Any Lufthansa board of directors that approves a 22 percent pay increase would have to resign the next day. The pilots’ demands aren’t just high, they’re unreal.

 

Image of the Day

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.