The DAX started off with a bang this morning, trading up slightly to reach a new annual high of 10,784 points. HeidelbergCement, Volkswagen and Continental all posted share gains, while Lufthansa’s ongoing labor negotiations with 5,000 disgruntled pilots sent it to the bottom of the list. Europe’s largest airline is plagued by strikes and disputes over employment contracts and early retirement. Let’s hope Lufthansa’s problems don’t turn the DAX’s bang into a whimper.
One possible reason for VW’s share bump is the sigh of relief it gets to enjoy today after Germany’s Federal Motor Transport Authority approved the carmaker’s technical fix for 460,000 diesel cars outfitted with cheat software. VW aims to have its repair program for the 11 million manipulated diesel cars worldwide set by the end of this year. Meanwhile, weekly newspaper Bild am Sonntag reported Martin Winterkorn, the man in the driver’s seat when VW admitted to cheating emissions tests in September 2015, is being courted by several DAX companies for seats on supervisory boards. Come again?
What comes first: electric cars or charging stations? German automakers and energy companies can’t seem to agree on an answer, and their game of chicken is leaving e-car owners puttering along on empty. In 2015, the number of electric cars increased by 90 percent, while the number of charging stations went up by only 5 percent. Automakers will find it’s hard to charge ahead in electro mobility when they’re stuck in a bottleneck.
Polish regulators have thrown up a roadblock on the proposed Nord Stream 2 project, meant to double the amount of gas Russia pipes into Western European homes. Eastern European nations are wary of the project, saying Russia could blackmail countries by cutting off gas supplies. The worry is reasonable, but as Europe depends on Russia for one-third of its energy needs, Gazprom, which owns Nord Stream 2, probably won’t be left out in the cold for too long.
Chancellor Angela Merkel returns to Berlin from her holiday today to a gathering of her Christian Democrats, who are expected to re-elect her as party leader for two more years. On today’s agenda will be how to pull the plush rug out from under Germany’s comfy retirees while still getting their vote in next year’s federal elections. The Bundesbank will present some thoughts on the matter – expect higher contributions, lower pensions and later retirement. Music only to youthful ears.
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