Breakingviews

German job miracle keeps defying gloom-mongers

May 29, 2015

Most experts predicted that January’s imposition of a national minimum wage would lead to heavy job losses. But employment in Germany keeps rising and economists are confused. The fears may yet be vindicated, although it could take a recession to show they were right.

Bond turmoil signals new era of return-free risk

May 15, 2015

Forget the risk-free rate - investment safe havens are in short supply. Cash can be costly. Gold is a dollar proxy. And recent gyrations in the largest debt markets have undermined the concept of risk-free returns. When this last compass fails, investors are really at sea.

Deutsche Bank revamp puts capital ahead of returns

April 27, 2015

Exiting Postbank, and cutting 200 bln euros of investment bank assets and 3.5 bln euros of costs, is what the German lender needs. A 5 pct leverage ratio goal is also higher than expected, raising the bar for European rivals. But it means investors face a wait for decent returns.

Deutsche should limit retail selloff to Postbank

April 20, 2015

The German lender’s strategy review has narrowed down to selling part or all of its retail business. A wholesale-only Goldman Sachs equivalent would be more profitable, but less stable. Deutsche would be better off staying a universal bank - but cutting a lot more cost.

Hairy deals mean European animal spirits returning

April 15, 2015

Shell-BG and Nokia-Alcatel are complicated, long-mooted deals finally coming to fruition. Exor’s move is just plain ballsy. American firms powered last year’s $3.5 trln global M&A bonanza. With Old World boards and bosses becoming more daring, Europe looks set to catch up.

Greece comes kicking and screaming to reform table

April 2, 2015

The Syriza government’s latest reform proposals include some concessions to its public creditors. The plan still lacks detail, and reneges on past promises. The government is fiddling while Athens burns, and the risk of an accidental euro zone exit is rising.

Airline safety after the crash

By Edward Hadas
April 1, 2015

The German prosecutor says Andreas Lubitz was certified as a pilot despite treatment for suicidal tendencies. He seems to have deliberately crashed the Germanwings plane he was flying. The disaster looks like an aberration, but the industry’s approach to pilots needs a rethink.

Germanwings tragedy requires industry response

March 27, 2015

The crash has drawn attention to less evident aspects of flight safety – possible risks posed by crew rather than passengers. That raises questions about procedures at parent Lufthansa and all airlines. But safety is an iterative process that innovates for unforeseen situations.

Deutsche Bank’s long round trip

By Edward Hadas
March 25, 2015

The German bank spent two decades expanding massively into the capital markets business. Along the way, it lost touch with its original mission of serving German businesses and their owners, without finding a viable new one. The crisis has spurred a return to traditional values.

Europe’s rebound poses new questions

By Edward Hadas
March 4, 2015

Jobs, growth, morale: the Old Continent is perking up. Policymakers and investors need to adapt. The threat of deflation may recede. Central bank bond-buying may prove unnecessary. And established politicians could regain ground. Yet investors might still cling to bonds.