Opinion

The Great Debate

from The Great Debate UK:

German elections too close to call

Erik Kirschbaum- Erik Kirschbaum is a Reuters correspondent in Berlin. -

Has this been dullest German election campaign in decades or the most exciting?  Has the battle for power in Berlin between Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier that concludes with Sunday's election been a memorable showdown or a forgettably boring contest?

Many journalists, pundits and voters have complained it's all been a merciless bore compared to the high-octane battles of the past with little action and precious few highlights.

But I would argue that in many ways it has been one of the most interesting campaigns in decades. Why? Because the outcome is so uncertain and there are more different government possibilities that could result from it than at any time in Germany's post-war history.

Instead of the usual centre-right or centre-left choice that German voters had for the last 60 years, there are options galore this time -- at least in theory.

There could be a centre-right government, another grand coalition or several three-way coalitions that could include the Free Democrats, the Greens and from a purely  mathematical point of view even the Left party that have never been tried before at the federal level.

from The Great Debate UK:

Ghosts of Germany’s communist past return for election

kirschbaum_e- Erik Kirschbaum is a Reuters correspondent in Berlin. -

Will the party that traces its roots to Communist East Germany's SED party that built the Berlin Wall soon be in power in a west German state?

Or is the rise of the far-left "Linke" (Left party) in western Germany to the brink of its first role as a coalition partner in a state government with the centre-left Social Democrats (SPD) simply a political fact-of-life now so many years after the Wall fell and the two Germanys were reunited?

Will a "red" government in Saarland scare away investors and doom the state, as its conservative state premier Peter Mueller argues in a desperate fight to his job?

from Commentaries:

GM blog lifts hood on power struggle over Opel

cfcd208495d565ef66e7dff9f98764da.jpgIt's not often you get to lift the hood and watch a power struggle going on in the engine room of General Motors. But the vice-president of GM Europe, John Smith, has just provided tantilising details of the arguments over the rival bids for Opel/Vauxhall, the main European arm of the fallen U.S. auto giant. Smith is the chief negotiator on the sale of Opel.

In a blog apparently intended to reassure Opel staff, but accessible to the public, he insisted GM had not specified a preferred bidder. But he made clear his own preference for the bid from Belgian financial investor RHJ International, which is loosely related to U.S. private equity fund Ripplewood, over the offer by Canadian-Austrian car parts maker Magna and its Kremlin-backed Russian partner Sberbank.

Smith's post is entitled "Clearing the Air" and was ostensibly written to clarify GM's intentions and dispel erroneous reports ascribed to interested parties. But his account shows just how poisonous the atmosphere appears to be between GM and Magna, and GM and the German government, which backs Magna's bid. It also suggests that the air is not too clear within GM's top management either.

Germany risks zombie banks

Margaret Doyle– Margaret Doyle is a Reuters columnist. The opinions expressed are her own –

Germany’s politicians seem to have rescued their bad bank. Pushing back the valuation date for toxic assets to before the Lehman collapse has made it more likely that banks will consign their dud investments to the voluntary scheme.

It had looked as if the banks might simply boycott it. However, while the government has scored a political goal, it is no closer to its aim of boosting lending to a credit-starved German economy.
The essence of the scheme is that banks will be able to transfer some 250 billion euros of toxic assets into “eine Bad Bank”. In exchange they receive government-backed paper that they can count towards regulatory capital.

Europe frets over crisis exit strategy

Paul Taylor
– Paul Taylor is a Reuters columnist. The opinions expressed are his own –

Higher taxes? Lower public spending? Devaluation? Inflation? Investment in green growth?

European governments are pointing in very different directions as they debate an exit strategy from the global financial crisis. Despite European Union efforts to coordinate economic policy, there are clear signs that the main European economies will charge off in disarray towards separate exits.

from The Great Debate UK:

Germany’s bad bank fudge

REUTERSpaul-taylor-- Margaret Doyle and Paul Taylor are Reuters columnists. The opinions expressed are their own --

LONDON/PARIS, April 23 (Reuters) - Germany is to set up a system of bad banks before the summer recess to hold some 250 billion euros of toxic assets. Finance Minister Peer Steinbruek has assured taxpayers that his solution -- called "eine Bad Bank" (there is no German word for the concept) -- will not weigh on the budget.

He is fooling them, if not himself. If the rescue really were such a free ride for the taxpayer, some savvy commercial investor would have stepped in. Under the proposed scheme, the taxpayer will end up carrying the risk of "Schrottpapiere" (scrap paper).

U.S. fights fire, Germans fear flood

Paul Taylor Great Debate– Paul Taylor is a Reuters columnist. The opinions expressed are his own –

The United States is fighting a fire in the world economy, but Germany and some other European countries fear a flood of inflation as a result.

That clash of cultures is at the heart of transatlantic debate over whether Europe should spend more and ease monetary policy to revive growth, with a deep economic contraction certain this year and an end to the recession not yet in sight.

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