“There is no more risk that the euro will implode,” declared French President Sarkozy two days before the first round of the election. “The crisis is finished,” he said a few weeks ago. Thanks to his leadership. However, François Hollande, the socialist challenger and likely winner, has a prescription for fixing the very crisis Sarkozy declared finished—an ambitious plan that might lead to the break-up of the Eurozone.
Europe – Germany
But the PIIGS Get to Live Longer
by Wolf Richter • • Comments Off on But the PIIGS Get to Live Longer
Germans work longer hours and retire later than many of their brethren in Europe, and after many years of shrinking real wages, they don’t even get paid that much anymore. But it succeeded, at least temporarily, and the dour mood of yore has been superseded by exuberance about their superior economic model. And what do Germans get for their hard work? Well, probably a lot—but the one thing they’re not getting is extra time to live.
Escalation in Euro Rift: Bundesbank Gets Sued for Perfidy
by Wolf Richter • • Comments Off on Escalation in Euro Rift: Bundesbank Gets Sued for Perfidy
“Target 2” used to be a mundane part of the European System of Central Banks that people didn’t pay attention to. The ECB would borrow from the central bank of one Eurozone country and lend to the central bank of another. But in 2008, as capital flight from peripheral countries heated up, credit flows became one-sided and mushroomed with each outbreak of the crisis. And now it’s threatening Germany.
The Big Rift Between Germany and France
by Wolf Richter • • Comments Off on The Big Rift Between Germany and France
The crowd at the Place de la Concorde in Paris on Sunday, one week before the first round of elections, had come to hear French President Nicolas Sarkozy beg for his job. And politicians were listening warily … in Germany. He’d already shocked them in March when he’d declared that he wanted to renegotiate the Schengen Treaty. Now he went after the independence of the European Central Bank. Germany’s answer was swift.
Suddenly A Nasty Fight over Subsidies for Nukes in Europe
by Wolf Richter • • Comments Off on Suddenly A Nasty Fight over Subsidies for Nukes in Europe
The meltdowns at Fukushima that have caused so much havoc have also paralyzed Japan’s nuclear power industry. The last of its 54 reactors will be taken off line in May. “Deindustrialization” grips power-starved Japan. TEPCO, owner of the plant, is bailed out with trillions of yen in taxpayer money. And now, halfway around the world, in the EU, nuclear power is lining up to suck at the teat of the taxpayer, but ingeniously, those in other countries.
The Nightmare of the European Auto Industry
by Wolf Richter • • Comments Off on The Nightmare of the European Auto Industry
Europe with its relatively affluent population of 500 million has turned into a nightmare for the auto industry. And the R-word—restructuring—unpalatable and almost illegal as it is in Europe, is being bandied about, this time by Fiat-Chrysler CEO Sergio Marchionne, who, as President of the European Automobile Manufacturers’ Association, spoke for all EU automakers. It was a dire warning and a cry for help.
China, the Number One Foreign Investor in Germany
by Wolf Richter • • 3 Comments
The latest success—I suppose you could call it that, at least for those involved on the financial end—was the Kiekert deal last week. The company was founded in 1857 near Düsseldorf, Germany, and became the largest manufacturer of automotive door-lock systems. Its customers are GM, Ford, VW, BMW, and other automakers around the world. But now a Chinese company bought Kiekert, the sign of a sea change.
Inflation in the Cost of Corruption
by Wolf Richter • • Comments Off on Inflation in the Cost of Corruption
Inflation pervades every aspect of our lives, from skyrocketing gasoline to rents to well, corruption. But inflation in the cost of under-the-table payments is notoriously difficult to measure, and so it’s not included in any of the indices. But in Germany, which is historically paranoid, and rightfully so, about inflation, after two wipe-outs in one generation, there’s progress: inflation in the cost of corruption can now be estimated.
Next Phase in Merkel’s Desperate and Risky Gamble
by Wolf Richter • • Comments Off on Next Phase in Merkel’s Desperate and Risky Gamble
The conflict in the Eurozone has simmered for weeks. On one side: Chancellor Angela Merkel who is protecting her oeuvre. On the other: François Hollande who is running against President Sarkozy. But now, Merkel raised the stakes by roping in 3 powerful allies and lining them up against Hollande—a desperate and risky gamble to keep Sarkozy in power.
Deep Trouble at the Core of the Eurozone
by Wolf Richter • • Comments Off on Deep Trouble at the Core of the Eurozone
In France, new vehicle registrations are plunging: -17.8% in December, -20.7% in January, -20.2% in February. French automakers suffered the most. PSA Peugeot Citroën -29.2% and Renault -28.5%. The German auto industry is still basking in last year’s glow of record worldwide sales and profits, and record bonuses for their beaming employees. But so far this year, they have been stagnating. And it’s just the beginning.