November 22, 2024

You are here: Home / Archives for government spokesman

Merkel Calls for Siemens’ Return to ‘Calm Waters’

July 29, 2013 by

FRANKFURT, Germany — Germany’s Chancellor Angela Merkel thinks it’s important for Siemens AG to get back to smooth sailing after the German engineering group’s announcement that it plans to remove CEO Peter Loescher, a government spokesman said Monday.

“From her point of view, Siemens is a flagship of German business, and so it is important to her that this global company returns to calm waters,” spokesman Georg Streiter said, while stressing that removing Loescher was “a company decision.”

Munich-based Siemens makes industrial machinery such as power generation and transmission equipment, high-speed trains, and medical diagnostic scanners. It has 370,000 employees, including 56,500 in the United States, and is active in 190 countries.

The company’s stock dropped last Thursday after it said it would miss its 2014 goal of 12 percent profit margin, blaming “lower market expectations.” On Saturday, Siemens announced its board of directors would decide Wednesday on Loescher’s departure and choose another company executive as president and CEO.

News media speculation has focused on chief financial officer Joe Kaeser as the likely replacement.

Company shares traded little changed Monday on the first trading day after Loescher’s departure became apparent, up 0.2 percent at 79.86 euros in early afternoon trading in Europe.

Loescher, a company outsider hired in 2007 from drug company Merck Co., Inc., helped Siemens move past a corruption scandal involving payoffs to win contracts. But the company has lately missed profit targets and has had other slips such as late delivery of trains to Germany’s Deutsche Bahn railway and cross-channel railway Eurostar.

The company is worth 70.4 billion euros in market capitalization and had net profit of 4.59 billion euros for its 2011-2012 fiscal year ending Sept. 30. The profit figure was down 27 percent on the previous year. Revenues last year were 78.3 billion euros.

Siemens reports earnings for the latest quarter on Thursday.

Article source: http://www.nytimes.com/aponline/2013/07/29/business/ap-eu-germany-siemens-ceo.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Cyprus and European Officials Scrambles to End Bank Crisis

March 24, 2013 by Leave a Comment

Eight days after hashing out a bailout deal that the financial world reviled and the Cypriot Parliament unanimously rejected, the Eurogroup of finance ministers and Cyprus officials plan to meet here Sunday night with their pencils sharpened.

They face a deadline of Monday, when the European Central Bank has said that it will cut off the financing that is keeping Cyprus’s teetering banks from collapsing.

The Cypriot president, Nicos Anastasiades, flew to Brussels on Sunday after mapping out a tentative outline of a deal late Saturday with representatives of the troika of negotiators involved in the bailout: the European Central Bank, the European Commission and the International Monetary Fund.

His first order of business was a meeting with Mario Draghi, the president of the central bank; Christine Lagarde, the managing director of the monetary fund; and José Manuel Barroso, the president of the commission. Herman Van Rompuy, the president of the European Council, which represents European Union leaders, was expected to preside over the meeting. 

Mr. Anastasiades had also briefed Cypriot political leaders on the outline, which is said to call for imposing a hefty one-time tax on bank deposits above  100,000 euros, or about $130,000. Whether that will pass Parliament, whose signoff is needed, remains to be seen.

“The situation is very difficult,” the president said in a statement issued early Sunday.

The Eurogroup that will meet is the 17 finance ministers of the countries using the euro, whose taxpayers would ultimately provide the 10 billion euros, or $12.9 billion, that  Cyprus is seeking.

Traveling with Mr. Anastasiades was the deputy leader of the ruling Democratic Rally party, Averoff Neofytou;  the minister of finance, Michalis Sarris;  and the government spokesman, Christos Stylianides.

The president planned to meet in Brussels with the head of the monetary fund, Christine Lagarde, who will be participating in the meeting of the finance ministers.

Those ministers drove a hard bargain last weekend, demanding that Cyprus come up with 5.8 billion euros of its own money in order to receive the bailout.

The source of that 5.8 billion has been the sticking point ever since. As announced in the early hours of Saturday a week ago, the money would have been raised by levying a one-time tax on all depositors with money in Cypriot banks — a large portion of which is held by wealth foreigners, many of them Russian.

But that plan met a storm of criticism, because it would have hit even small depositors and seemed to violate the trust implicit in the deposit-guarantee system used throughout the euro zone in which accounts of less than 100,000 euros are supposed to be insured by the government.

The fear of an immediate run on Cypriot banks has kept the country’s banks closed since then, although they are scheduled to reopen Tuesday. The only money available to depositors has been what they can take from automatic teller machines before reaching their daily account limits. The government has ordered the banks to keep the A.T.M.s fully loaded, and lines of customers have been snaking from them sporadically throughout the week.

Still unclear is whether the banks could reopen if the European Central Bank carries out its threat to cut off short-term financing unless a bailout deal is reached.

The revised bailout terms now under discussion would assess a one-time tax  of 20 percent on deposits above 100,000 euros at one of the nation’s biggest banks, the Bank of Cyprus, which has the largest number of savings accounts on the island. Because Bank of Cyprus suffered huge losses on reckless bets it took on Greek bonds, the government appears to be taking  depositors’ money to help plug the hole.

A separate tax of 4 percent would be assessed on uninsured deposits at all other banks, including the 26 foreign banks that operate in Cyprus.

Under the plan, savings under 100,000 euros would not be touched — a significant difference from the original plan, which not only enraged Cypriot citizens but ignited fear that precedent had been set for  euro zone governments to tap insured bank savings in times of a national emergency.

Cypriot officials have also backed off a proposal that would have sought to raise billions of additional euros by nationalizing state-owned pension funds. Germany, whose political and financial clout dominates euro zone policy, had indicated it opposes the move.

President Anastasiades, a lawyer by profession and a center-right politician of the same side of European Union politics as German Chancellor Angela Merkel, was voted into office in February on the promise of reaching an effective bailout with his euro zone peers.

According to those involved in the first round of negotiations a week ago, Mr. Anastasiades was the one who pushed for the largest accounts to be subject to a tax of less than 10 percent   — a formula that meant the tax would have to hit all depositors in order to raise enough money.  The thinking was that he did not want to seem to be making a target of the wealthy foreigners who have long considered Cyprus a bank-friendly tax haven. That many of those foreigners were Russian was not lost on political observers.

In the last week, Cyprus  sought to work out some sort of side financial-support deal with Moscow, but those talks went nowhere. Russia was said to be trying to make any new support contingent on access to Cyprus’s  potentially rich offshore natural gas deposits.

The natural gas discussions provoked another geopolitically fraught aspect of the Cyprus crisis: the fact that the northern part of the island has been controlled by Turkey ever since an Athens-back coup in Cyprus in 1974. On Sunday, Turkey’s ministry of foreign affairs issued a statement warning Cyprus not to use the natural gas as collateral. Doing so, it said, would ignore “the inherent rights of the Turkish Cypriots who are co-owners of the Island.”

With Turkey bristling and Russia seemingly not a fallback option, and with the Cypriot Parliament intent on protecting small bank account holders, Mr. Anastasiades best hope now might be the revamped proposal, and the newly sharpened pencil, that he is taking to Brussels.

 

 

James Kanter reported from Brussels and Liz Alderman from Nicosia, Cyprus. Andreas Riris contributed reporting from Nicosia.

Article source: http://www.nytimes.com/2013/03/25/business/global/cyprus-and-european-officials-scrambles-to-end-bank-crisis.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Euro Zone Leaders Weigh New Budget Rules

November 28, 2011 by Leave a Comment

Investors clearly are not persuaded by the intermittent efforts that Europe has made to protect major countries like Italy and Spain from the crisis, which started in smaller, more fragile economies like those of Greece and Ireland. The leaders of Germany, the mainstay of the euro zone, want a new treaty that would stop euro nations from posing a threat by running large deficits or amassing crushing debts, but France, the zone’s second-largest economy, believes that amending treaties would take too long to help now.

France, Germany and Italy are ready to agree on new rules and encourage more coordination of economic and fiscal policy, the French budget minister and government spokesman, Valérie Pécresse, said Sunday.

The idea would be “a governance with real regulators and real sanctions, that would give real confidence,” she told the television channel Canal Plus. “Germany, France and Italy want to be the motor of a Europe that is much more integrated, much more solid and with regulatory mechanisms that are virtuous, that don’t allow a cheater, so that there is no one who can exempt themselves from the rules that are set.”

When members make a complete commitment to the new rules, Ms. Pécresse added, “then European institutions will be able to play their full role,” including the central bank. The agreement would include as many as possible of the 17 European Union nations that use the euro, she said.

Still, it is unclear whether such an agreement would persuade the markets that the European Union, the central bank and fellow euro zone nations stand fully behind Italy and Spain, which both have new governments striving for austerity and structural reform. Meanwhile, signs are accumulating that the crisis is continuing to spread, including a weak German bond sale on Wednesday and a contraction in interbank lending in Europe.

Chancellor Angela Merkel of Germany has firmly opposed two ideas for solving the crisis: an expanded role for the central bank and new bonds to be issued jointly by the euro zone countries, known as eurobonds. But Germany has become increasingly isolated in its stand on the bank, as fellow deficit-hawk nations have wavered. The Finnish finance minister, Jutta Urpilainen, told reporters in Berlin on Friday that “if there is nothing else left, then we can think about strengthening the role of the E.C.B,” and the chancellor of Austria, Werner Faymann, told the APA news agency on Saturday that the bank could play “a stronger role.”

France agrees with Germany that eurobonds are a bad idea now, because they would put too much burden on the euro zone countries whose credit remains sound, though they may make sense once new budget strictures are in place and members are coordinating their policies more tightly. But the government of President Nicolas Sarkozy is frustrated with Mrs. Merkel’s refusal to allow the supposedly independent central bank to act as a lender of last resort, to lend to the new European bailout fund or to intervene more forcefully to hold down sovereign bond rates.

Bypassing the European Union treaty process may bring an outcry from European Union members like Britain that do not use the euro and that have warned against widening the gap between countries inside and outside the currency union. And there are worries that the euro zone itself will divide into a German-led fiscal-rectitude bloc and everyone else. A headline in the German newspaper Welt am Sonntag declared: “Merkel and Sarkozy Found a Club of Super-Europeans,” after what they described as secret talks over bilateral deals.

“There are no secret German-French negotiations,” a German government official said Sunday. “There is the previously announced, intense cooperation between Germany and France on proposals for limited treaty changes as the necessary political answer to the debt crisis.”

Though to some degree they go against the principles of solidarity and consensus in the 27-nation European Union, intergovernmental agreements among some but not all members have always been an option. A precedent is the Schengen agreement, allowing visa-free travel; it now covers 22 of the 27 members of the union and three nonmember nations.

Germany believes that the long-term answer to the crisis is to create “more Europe” and more federalism. That may mean setting up a common treasury and finance ministry for the euro nations, central intervention into national budgets, and more uniform pension and tax policies. Such a transformation would require a new treaty, which would take at least three years to draft and ratify, most analysts agree.

An intergovernmental agreement among the main countries of the euro zone could be reached much faster, and unlike a treaty, would not involve holding any national referendums.

Article source: http://feeds.nytimes.com/click.phdo?i=b9b94d084abfe7a121dc5e274379db51

Filed Under: Business News Tagged With: , ,