Entries Tagged as 'European Economy News'

Siemens To Debate Filing Lawsuit

The well known German company Siemens plans to file a lawsuit worth millions in light of the scandal that occurred last year. The company was headlined in the newspaper after it was discovered that former executives were involved in deceit and corruption.

One of the people whom Siemens is hoping to sue is the ex-chairman of the company, Heinrich von Pierer. It is alleged that he might have known about the corruption taking place. Pierer states that he was not aware of any corruption or bribery taking place.

The board will consider the details of the lawsuit as it meets with its lawyers, and within the next two weeks it will have a decision about whether it will go ahead with the civil lawsuit. The lawsuit will be the largest in German history.

ARD To Manage Assets For Romanain Property Fund

A new property investment fund has been established this week, with Anglo-Romanian Development (ARD) to be the Asset Manager.

This new fund has been set up by Catalyst Global Funds LLP, who have been open about their attempts to make use of ARD’s considerable experience with the Romanian property market and set up a framework that will deliver high-end returns. During 2007, ARD increased their annual property investments by 40%.

Lawrence King, an employee from Catalyst Global, made a statement regarding ARD’s involvement, which is to be lead by Alex Pintea. King said that Catalyst believes ARD to be the ultimate choice for fund managing in the region and that they are expecting to quickly see approximately £20,000,000 invested in the property market.

Due to the style of investments implemented by both ARD and Pintea, the company is competing strongly against competition, by being highly exclusive in the opportunities that they partake of. Pintea has said that this form of investment, in the expanding market of Romania, will lead their client’s to higher profits, and growth rate, than those in the U.K market.

BA Delays Complete Move To Terminal Five

With the fiasco that was caused by the opening of terminal five, British Airways has decided to increase the time it will take before moving its operations to the new terminal.

With the problems at the new “state of the art” terminal, BA said that it is best to delay moving its long haul flights to the new terminal, until all the “bugs” are sorted out. BA has said that it will extend its moving date to Terminal Five for at least a month.

Spokesperson and CEO Willie Walsh was quick to soothe fears that the delay to move to terminal five was in the best interest of BA’s customers, and can help to increase the confidence passengers feel with the airline carriers.

Since March 27, British Airways has had to cancel at least a hundred flights when the baggage system failed to operate.

Wal-Mart Sets Its Sight On Russia

Wal-Mart has announced that its new executive will look at the viability of opening a store within Russia. Wal-Mart hopes to expand to Russia, and any of the other European partners that this country trades with.

The new executive Stephan Fanderl has become the presiden of the emerging markets - East division for Walmart. He will have the task of looking to see if Russia will be a profitable country for Wal-Mart to base itself.

At the moment Wal-mart is based in many countries such as Brazil, China, United Kingdom, and has over three thousand stores around the world.

Weak Pound Rate Affects Holidaymakers

A large number of people will start to feel the weakness of the UK’s pound when they go on holidays this year. The more rapid growth in the euro causes them pay an increase in price of all the hotels, meals in major European destinations.

As more traders continue to increase Europe single currency to record highs, anyone on holiday is expected to pay more than one fifth they normally would compared to last year.

There has been over a ten percent fall since last year, but the Euro has regained strength leaving the pound to drag behind. The slow growth of the pound is being blamed on by its ties to the US markets.

Initially, the euro reached a new level to trade at 80p yesterday, the International Monetary Fund warned on, it is only 1.6% growth in the UK and not the 2.25 percent this year, compared to the government’s claims.

Alcon Snapped Up By Novartis

With the recen news about the economy, and the decline in shares in pharmaceutical companies, Novartis announced that it had recently purchased Alcon.

Alcon is well known as a major company specialized in solutions and services for eye care.

With this new business venture, pharmaceutical giant is expected to buy Alcon for at least $143 dollars per share.

This purchase by Novartis was not a result of recent deals but came after many years of negotiation between the two companies. Chairman of Novartis Daniel Vasella was happy about the company’s new acquisition.

He saw this as a way to increase the market value of the company while the economy was suffering a downturn.

Shares in Novartis are currently trading at $148 per share.

The Peace Of The Airways To Be Disrupted

For those of us that have enjoyed the peaceful holiday travel - this is about to change.

The EU has announced that it will allow passengers the ability to use their mobile phones while in the air.

This new ruling will not be completely installed until approximately six months time, but does give passengers flying within the European Union the right to access and use their mobile phones that have been carried on board with them.

Hopefully this new ruling will reduce the roaming costs that many travelers face when using their mobile phone in another country.

Previously airlines banned passengers from using their mobiles because it is the belief that this causes problems with operating airplanes.

However, carriers such have Air France have suggested that this might not be the case.

Food Shortage Lead To Riots and Chaos

People all over the world are calling on governments to decrease the rising food prices.

Food prices have increased dramatically in the past few years all over the world. In Asia, there is an increase in rice prices. The economy is also trying to recover from increasing wheat prices. This will affect a large number of consumers that depend on bread and pasta. In many places within Europe, there has been an increase in dairy and milk based products.

The shortage of food has what has recently caused the riots within Haiti, Eygpt, and Cameroon. Therefore, the World Bank prepares to work with governments to reduce the food crisis before it escalates. It has plans to inject at least $500 million US dollars into the UN World Food Programme.

However, this will be only a temporary solution to determining how to resolve the increase in food and fuel prices many countries are faced with.

Hermitage Fund Exposes Alleged Fraud By Police

Russia is making headlines within the European Union again.

This time it is in regards to a large scam uncovered that involved many influential people in Russia. Information released by Hermitage Capital Management show that an elaborate scheme of fraud was launched against its subsidiaries.

According to Hermitage Capital Managament, Ltd, papers and company seals were obtained by high ranking members of the police to cococt a scheme to sue the company for millions.

The scheme involved carrying out raids on banks and foreign companies held by the Hermitage Fund.

It is alleged that high ranking police officials planned to carry out a fake tax investigation on the company that involved gaining control of confidential papers.

Afterwards, members of the group were planning on using this to steal the assets held by the Fund.

At least one lawyer was beaten an arrested when a raid was carried out at his office.

Europe Backs Missile Defence

The European leaders of Nato have announced that they will be approving the U.S.’s bid to install new missile defenses within Europe, ahead of George W. Bush’s talks with the Russian President, Vladimir Putin.

Nato leaders convened at at summit in Bucharest last Thursday, where they announced that they would support the plans, and even extend them to countries not initially suggested by the U.S., such as Turkey and regions of the Balkans.

George W. Bush will be politically reinforced by the European acceptance of this new defense system when he meets with Putin this weekend.

At this point last year, the alliance was divided over this issue, but with redoubled efforts by the U.S. to have a more open dialog with their fellow Nato members, and with Russia, the system has been given the go ahead after receiving revisions by European leaders of Nato.

An official from the U.S. has stated that this issue was expected to be highly divisive for Nato, however the European members of the international group have accepted the U.S.’s sincerity in this issue and their renewed efforts at working with the organization, especially its European and Russian members.

The inclusion of Russia into the scheme comes on the back of Putin making disparaging remarks regarding the U.S.’ intentions for the region, and especially towards his own country. The U.S. responded by saying that this system was designed to counter any missile or nuclear intentions from Iran and that it would not interfere with Russia.

Nato released a statement last Thursday in which they stated that they are of a similar view to the U.S. in regards to the potential threat that Iran poses to the region.

Energy Shortages Possible In Germany

The state of Germany’s consumption of energy has been in discussed in the past week. Analysts are predicting that the country is in for a series of power shortages within the near future.

Even though they use coal powered plants, Germany has started a trend to stay away from using coal to provide energy. Another source of energy for the country is nuclear power. However, it was announced this week that Germany hopes to shutdown all of its nuclear plants by the year 2021.

Yet it is predicted that Germany will might start to experience a shortage of energy power starting this summer, especially when less cool water is available for the nuclear power plants.

Iceland Launches Official Investigation

The Financial Supervisory Authority in Iceland and launched an official investigation into allegations against international hedge funds. There are currently rumors circulating of attacks being made against the Icelandic stock market by hedge funds.

Whist this is going on, one of Iceland’s leading banks, Kaupthing, is currently deliberating as to whether they will initiate legal action against one of the U.S.’ leading banks, Bear Stearns, for their part in organizing a trip to Iceland for senior hedge fund employees in January.

According to analysts, these dual moves are indicative of the growing aggravation of Iceland’s government with the ostensible attacks from international banking groups on the Icelandic stock market and currency, the krona.

Authorities are redoubling efforts to educate international investors about the economy in Iceland, using presentations and road shows as tools in their bid to counter the attacks.

The economy in Iceland has recently seen an extraordinary boom, which has resulted in a macroeconomic imbalance. This shows in the current deficit in account of 16% of GDP in 2007. Annual inflation is also showing signs of the imbalance, as it is sitting at 8.7% whilst the central bank’s target is actually 2.5%.

All of these issues are further complicating the current Icelandic economy, which is having to deal with main banks using disruptive leverage techniques which are having adverse effects on the confidence of investors. Stocks are also declining due to these factors, which is raising inflation at the same time as sending the currency lower.

In a bid to aid the current situation, the central banks last week brought in an interest rate rise of 1.25% to help alleviate some of the financial pressure. This brings the interest rate to a record high of 15%.

Regardless of the current tensions in the economy in Iceland, they are still running with a budget surplus and the government managed to reduce the deficit from 26% in 2006. When juxtaposed with other markets and banks internationally, Iceland’s banks are robust and highly capitalised.

Kaupthing is currently being advised legally on the possible misuse of the market by Bear Stearns after they arranged for a trip to Iceland last January which three Bear employees attended and four employees from hedge funds.

The dominant Icelandic bank will be have the ability to subpoena e-mails and telephone records from Bear Sterns and the hedge funds involved, if they do undertake legal action. DA Capital Europe, King Street, Merril Lynch GSRG, and Sandelman Parnters, being the four hedge funds in question.

Friday saw the central bank chief, David Oddsson, say that Iceland was the indented prey of an attack on the Icelandic economy, and that brokers were attempting to destroy the financial system of the country.

Branson Starts New Sydney to LA Route

The second largest airline in Australia, Virgin Blue Holdings Ltd, has just issued a new service that will occur between Los Angeles, California, and Sydney. The flights which will start in December will save customers at least sixteen percent off their current travel expenses between these two cities. According to Richard Branson, Chairman of Virgin Group, the new flight route from Australia to the United States is quite an achievement and represents the last “piece of the puzzle”.

Ricard Obtains Absolut

The French spirit company Pernod Ricard was successful in outbidding its competitors to obtain the very popular Absolut vodka brand. Pernod Ricard will purchased the Swedish vodka company at a price tage of $8.34 billion dollars.

Based on this successful, Ricard will also “inherit” the debt that comes along with the company - at a tune of over 346 million Euros. The company was sold by auction by the state, with its outstanding debt being one of the reasons. According to Managing Director Pierre Pringuet, “We wanted to bolster our presence in the U.S. and Absolut, with its 5 million cases will definitely do that,” he stated.

France and Germany Weather The Financial Storm

Amid the current international market turmoil, some countries are faring better than others. Germany and France are proving the strength of the continental European economies by weathering the tumultuous markets with business confidence in tact.

Last Wednesday saw Germany’s Ifo institute release figures which showed that the index has risen for the last three months consecutively, bolstering them to the highest level since August 2007.

The Insee statistical office in France reported similar happenings there, with business confidence being at there highest so far this year.

Analysts believe that the heightening of confidence in the two largest economies in the eurozone is indicative of a spurring economic movement.

The president of Ifo, Hans-Werner Sinn, said that the economy in Germany is gaining strength and that even with the euro trading so high, many companies are still expecting high revenues for exports for last month.

Figures are emerging now which seem to indicate that the eurozone has only been obliquely struck by the current international financial crisis. The housing market is still progressing with strength, whilst manufacturing in the region is also healthy, most notably in Germany. Europe’s largest economy is engineering, and according to figures released by the employer’s association, growth within the industry is at an 40 year high.

Whilst the U.S. dollar has been falling and higher interest rates in Europe have somewhat slowed the economy, European financial analysts are not predicting dark skies for the continents outlook. Inflation is at a 14 year high in the Eurozone , however the European Central Bank has left their interest rate at 4% and have not followed the trail left by the U.S. Federal Reserve.

According to the ECB president, Jean-Claude Trichet, it is the fact that the foundation of the Eurozone economy is so strong, and that they have a better balance, which has left the regions markets in a more stable condition than their counterparts across the Atlantic. Trichet also said that unemployment has fallen to a 25 year low.

The ECB president also went on to talk about the the fact that the euro was trading so well, and the rammifications that would have on trade. He stated that there shouldn’t be a great deal of change in rates or too many market moves as that would lead to a downward trend in economic growth.

A survey conducted by the Ifo showed that business had become more positive about current situations than they had previously been.

In Germany, March saw the index rise to 104.8 for March from 104.1 for February, which is the highest point since August last year. France also saw the business confidence index rise, from 107 in February to 109 now.

Though there are some countries in the eurozone which aren’t doing so well. Business confidence in Italy has fallen to the lowest point in two years.

New Laws For E.U. On Emissions

The European Union are set to lead the world once more in the fight against global warming. Within the next 12 months, the E.U. will introduce new laws to ensure they reach the decisive goals they the have outlined for themselves.

Friday should see the E.U., which is comprised of 27 nations from Europe, announce from the culmination of a two-day summit, the new laws to come into effect no later than March 2009 which entail slashing greenhouse gas emissions and raising renewable energy used.

In the overview of the summit, leaders where also to discuss the current financial market crisis which has been ongoing since last year. All of the delegates are expected to completely disclose the extent of the distressed assets, incorrect balance sheets, and losses faced by financial institutions of their country’s.

The E.U. is expected to warn against using sovereign wealth for political investments, but praise the use of sovereign funds for commercially motivated capital and liquidity.

The summit commenced on Friday and was opened with a reaffirmation of the E.U.’s ongoing commitment to reforms inspired by the Lisbon strategy which, since a rocky start when first adopted in 2000, has yielded substantial positive results.

The next subject on the agenda will be to establish a cohesive plan of action against climate change; which according to José Manuel Barroso, European Commission president, the E.U. do not have significant credibility in this area yet, though with decisive action will gain it quickly.

At this stage, the E.U. already have a standing commitment to a greener Europe, with a pledge to reduce emissions by 20% and increase renewable energy consumption by 20% by 2020. Also committed to 2020, is the use of at least 10% biofule within vehicle fuels.

The Commission suggested in January that carbon reduction and the inclusion of renewable energy sources should be perhaps based on the wealth of the country, so that the more financially stable countries of the E.U. would be the ones to face the heavier financial burden.

The plan at this stage is for each nation to agree within on national goals by December, and then to have E.U. level legislation passed by March 2009.

The E.U. is looking to ensure that it is fully disclosed, economically equitable and balanced for all countries, whilst still attaining their goal of reducing carbon emissions by 30% by 2020.

Whilst there is still criticism from environmentalists, as they believe the E.U. is being too lenient because of industrial complaints and lobbies, many political leaders have a much different opinion. Some are concerned that they will no longer be economically competitive because some other countries may not impose strictures as regulated as those in Europe.

The E.U. combats these concerns by outlining in the summit statement the action, which is to be in the form of an international agreement, to be taken against those countries who do not take adequate measures against emissions.

The reason for the push for March 2009 is because that is the last month in which legislative session will be held before closures for European elections in June. When parliament reconvenes, they are necessarily going to have to sort administrative tasks and hold hearings for the next set of European Commission delegates.

This legislation needs to be passed by March 2009 and before the newly elected delegates of the Commission sit for autumn sessions; as in December 2009 a conference is to be held in Copenhagen, on global emission cuts, to which China, the U.S., and other powers, are to attend.

New Prime Minister Finally Installed In Belgium

Nine months ago, Yves Leterme, a divisive Flemish, Christian, Democrat was elected to the role of Prime Minister (PM) in Belgium. Next week, his administration actually steps in and takes up leadership of the country.

Since being elected last year, the PM has weathered a severe political deadlock and serious health issues.

Leterme is expected to be fully installed as PM during the Easter period, which will see this tumultuous period in the history of Belgium come to a close, however other dangers are lurking just around the corner for Leterme.

The new PM has been quoted as saying that it was only the King, the national football team, and bear that held the country’s Flemish majority and Francophone minority together in any sort of cohesion, and it is the job of Leterme to now pull these two factions together and create more positive bonds throughout the country.

Leterme is just now moving into the traditional HQ of the PM, a neoclassical office in Brussels, and right away must take steps to resolve the heightening tensions regarding further devolution.

It was these contentious issues which where the key to the embarrassing 192-day political standoff after the election in Belgium, during which time, with the post-poll stalemate lasting the longest in the country’s history, speculations were voiced over whether the country may even have split in two.

The campaign base for Leterme was in Flanders, which is a wealthy predominantly Dutch-speaking area, and his main campaign stratagem was a populist pledge which would bring more self-rule for both tax and employment policies throughout the provinces of the country, however this is shaping up to be a very difficult promise to deliver, and the pressure is on for him to offer, and have it accepted by officials, a new settlement on reform of the state, by July.

Belgium is known to be the most decentralised country in the European Union, with its federal government being purposefully fragmented. The current population of Belgium is 10.5 million.

Due to the decentralised nature of Belgium, the regions of the country are already largely self-sufficient, however a deal that was agreed to by the federal government last month will give provinces even more control over housing, agriculture, and industrial policy.

Whilst there are many in Flanders - the former campaign base of Leterme - who are voicing desires for more autonomy, there are groups of Francophones in the south - who were once economically dominant due to heavy industry, and who are now largely poorer and in need of Flemish support - who are loath to adjust the current situation.

The new five-part government is going to be tested a lot in these early months after the handover, and the current calls for constitutional amendments is just one of the tests before them.

The political ground for Leterme is still quite rocky, as he has been accused of being indecisive and has made made some regrettable comments about his Francophone constituents; though he is in the process of redeeming himself with this part of the population.

A fellow government official has made comments regarding Leterme’s ability to put his metaphorical foot in his mouth, saying that he isn’t a highly emotionally intelligent person and that his verbal faux pas’ aren’t in any way meant to be antagonistic towards the Francophone populace.

There are still those who believe strongly in Leterme, such as Frank Vandenbroucke, the socialist politician who worked with the new PM during the prior Flemish administration, saying that Leterme has always listened to all his advisers; wishing all groups to have a voice, before he makes any decisions.

The chances for Leterme to actually be PM looked rather slim for some time, as he failed to have a government ready to step in after he was elected in June, and his attempts to form that government were seriously hampered by arguments over constitutional reform and language rights. All of this was sorted finally in December when an agreement was reached.

Concerns were raised once again when Leterme was hospitalised for two weeks last month, at which time he was diagnosed with internal bleeding. Leterme is now back at work, and the 47 year old seems to have been humbled during this time.

He has stated that he is going to try to be more wise, calm, and equable, yet still just as enthusiastic and devoted to his responsibilities.

At a glance through Leterme’s records it is obvious that he is well qualified for his new role. Though he is Flemish, his father is Francophone and Leterme speaks perfect French. He has also worked in all levels of government in Belgium, from regional, to federal, to European Union.

The last PM, Guy Verhofstadt, was elected in 1999 and though he lost the election last July, he stayed to oversee a caretaker government until Leterme takes over later next week.

During the stalemate, Verhofstadt held together a three-month administration from December onwards to address urgent reform decisions.

Due to the decentralised nature of the country, most daily services weren’t affected by the political incident, however big-business was ham-stringed by the inability to pass imperative legislation and deep-seeded uncertainty of a unified Belgium in the future arose during this time.

Analysts, such as Marc Swyngedouw, of the Catholic University of Leuven’s social sciences faculty, have stated that to be successful, the new PM is going to have to gain the staunch support of both sides in Belgium. He believes that even with Leterme stepping in, the instability of the country is not at an end.

European Equity Previews ( Fugro, Thales, Comdirect, SAS Group)

Listed below are some of the company’s shares which may have unusual prices alterations in the region of Europe. Stock symbols are in addition following the company names along with the most recent stock prices.
The Index of Dow Jones Stoxx 600 declined to 1.3 % to end at 311.42 while Dow Jones Stoxx 50 fell down to 1.6 % to end at 3,090. On the other hand the Euro Stoxx 50 also dropped to 1.8 % to end at 3,617.68.

Europe’s largest process management and applied engineering company Abengoa SA expected higher demands for its fuel in order to increase prices. This would permit the company to begin production as the plant was halted recently said Amando Sanchez Falcon, the Chief Financial Officer. The shares of this plant dropped to 0.1 % or 2 cents to end at 21.80 euros. Switzerland Based Ciba Specialty Chemicals is the largest producer of paints and coatings organized its annual meeting. Its shares declined to 3.3 % or 1.3 francs to end at 37.7 francs.

Germany’s biggest online bank, COM Direct Bank offers direct banking, financial advisory and brokerage services. Its shares also dropped to 2.4 % or 20 cents to end at 8 euros. While the Dutch based Draka Holding NV which is the third largest cable producer in Europe said that its entire year’s profits quadrupled to 127 million dollars or 82.6 million euros. This happed after it had sold extra cables to the builders in the European region. The shares of this company showed an increase of 1 % to end at 19.45 euros.

Italy’s national lottery operator, Lottomatica SpA said that its earnings had surged from 822,000 euros to 163 million dollars or 106 million euros in 2007. The shares of Rome based company slipped to 1.1 % or 27 cents to end at 23.78euros. On the other hand Telecom Italia, biggest telephone company of Italy scheduled to organize a presentation to discuss the results of 2007 for the investors. This company’s shares also dropped to 3.7 % or 6.1 cents to end at 1.50 euros.

Dutch based multinational company and the largest surveyor of deep water oil fields Fugro NV said its earnings climbed to 53 % to end at 215 million euros in the previous year. This company released its present year earnings before the opening of the financial markets. Its shares had dropped to 0.5 % or 26 cents to end at 49.74 euros. While Stockholm based biggest airline carrier SAS Group’s owner from the Nordic region scheduled to forward the statistics very soon. However, its stocks slipped by 4.1 % to end at 53 kronor.

Thales Group- the biggest producer of military electronics in Europe said its earnings for the year 2007 doubled more than they had anticipated as there was more demand for security and aerospace equipments. Shares of this company dropped to 1.6 % or 64 cents to end at 40.45 euros. However, Italian scooter manufacturer Piaggio & C. SpA planned to present its previous years results. Its profits slipped from 70.3 million euros to 57.9 million euros. The stocks of this company slipped to 3.4 % or 6.1 cents to end at 1.71 euros.

SPD Chaos Spreads Doubt on Kurt Beck’s leadership

The chances for Germany’s Social Democrats leader Kurt Beck to lead his party into the upcoming national elections was in doubt after the domestic party revolution inclined SPD into chaos. Mt Kurt Beck by now is not popular politically after he did not keep his words by backing a controversial coalition with the anti-reform left party. His party suffered a heavy blow for the second time when this planned agreement collapsed due to confrontation from inside his party. This planned agreement gained nationwide attention since it would have made noticeable that SPD worked for the first time with the Left party in the western states of Germany. This planned agreement broke the prohibitions against the relationship because of the roots of the party in the previous party of East Germany’s Communist.
However, on 7th March, some of the senior officials of SPD rallied behind Kurt Beck as it was not clear whether he would stand against Angela Merkel as the chancellor candidate next year. SPD officials said that the deputy chairman of SPD and foreign minister Mr. Frank-Walter Steinmeier were the most possible alternatives. This crisis erupted on 7th of March when SPD leader Andrea Ypsilanti did take a decision in the western state of Hesse. She decided to abandon her notorious plan to run the state in the alliance with the Greens and also with the casual support of the Left party which also involves SPD dissidents and former communists.
Ypsilanti’s decision was followed by the announcement made by SPD legislator Dagmar Metzger that she would fight back against her party and probably vote against functioning with the Left party. However, before the January elections held in Hesse Kurt Beck had said that is party would not function with the Left party, later on he broke his promise by supporting Ms Andrea Ypsilanti’s alliance plan. Lowering the condemnations of Kurt Beck’s turnaround, Dagmar Metzger said that vows made by beck before the Hesse elections must be apprehended after the results.
The crisis of Hesse has done immense damage to the social democrats party said one of the spokesperson for Angela Merkel’s Christian Democratic Union, the partners of SPD in Berlin. Angela Merkel emerged fully supported by the events on 7th March, not slightest as the Christian Democratic Union even announced its plans to build an alliance with the Green party in the city of Hamburg. Last month’s regional elections were held in Hamburg. This type of coalition was the first of its kind and would increase the chancellor’s alliance alternatives after the national elections.
In spite of the troubles with SPD, the Hesse events occurred as a respite to the pro-reform section of the party which was led by Peer Steinbruck and Frank-Walter Steinmeier. Both these leaders had disagreed against the collaboration with the Left party. On 7th of March, Frank-Walter Steinmeier said that his party was not in a better condition however they would focus on looking ahead.

Strikes In Germany Continue To Create Chaos

Last Thursday saw pollsters from the office of Central Statistics and Meteorologists join sanitation workers, bank officials and teachers in the wave of cautioning strikes occurring across the public service sector. This new action began just hours prior to employers and union representatives embarked on two days of talks ,in Potsdam, on wages and conditions.

Heading into the discussions was Thomas Boehle, a representative for one of the employers concerned, who said that they were well prepared to be agile enough to improve their current situation. He told reporters that they would forward an offer to the unions if discussions proceeded effectively.

On January 1st, members of the labor union Ver.di had demanded wages to be increased by 5.5%, rather than the proposed 8%, for the 1.3 million workers of the public sector in Germany. Over the past two years the German government had only offered an increase of just 5% along with the longer working hours, this offer was not accepted by the labor union.

A possible outcome of the negotiations is that employers will offer an extra rise in wages and incentives in a long term agreement, said Boehle.

Frank Bsirske, the leader of the labor union said that he was hoping these strikes would deliver a strong message to employers. He disagreed that workers from the public sector deserved extra income through tax revenue raising as the economy of Germany improves.

Several thousand workers from the public sector have stopped working in airports, police forces, municipal offices, banks and schools in a bid to gain better conditions. This new wave of strikes have usually lasted for only a few hours, unlike the unrestricted, full-scale stoppage seen earlier in the month. Leader of the German Federation of Labor Union, Michael Sommer, told the daily Neue Presse that these warning strikes may end very soon, if employers renegotiate and make a sensible offer. The Wiesbaden based Federal Statistics office and Offenbach’s German Weather Service were hit badly due to the stoppage which focused on southern and central Germany last Thursday.

School Teachers and the Public transport workers in Bavaria, Baden-Wuertenburg and Hesse also walked off their jobs. The bus, tram and sub-way workers in Berlin also walked off their jobs for the second day for the 10 day public sector strikes which are intended to gain an increase in wages of 12%.

Disputes over wages roil amidst concerns over awareness in Germany of wealth from the present economy of the country being distributed illegally. In another dispute, the train drivers union GDL has also threatened to start a determined strike against the rail network of the region on Monday, if deutsche Bahn AG, the national railway operator, does not sign a negotiated agreement which was made earlier.