Olaf's Feed
Dec 16, 2013
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New German government to take chances on growth

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The most obvious symbol of the continuity Angela Merkel has wanted to showcase with her third cabinet is Wolfgang Schaeuble, who will keep his job as Germany’s Finance Minister in the new ruling coalition. That clearly shows that Berlin’s European policies will remain unchanged. Other EU governments will welcome a German team committed to keeping the euro zone together – if anything even more so, considering the pro-European Social Democrats’ influence in the new government.

Nov 26, 2013
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Bayer can pay more for cancer blockbuster partner

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Bayer can pay more for Algeta. After a leak, the German pharma and plastics giant has admitted making a 336-crown-a-share, or 1.8 billion euro ($2.4 billion), takeover overture to its Norwegian partner. Shares in the smaller firm promptly rose above Bayer’s proposal. That looks appropriate: this opening gambit is not overly generous. Algeta’s flagship prostate cancer treatment, Xofigo, is promising. And the technology pioneered here could be used to treat other cancers.

Nov 19, 2013
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EasyJet’s growth will get harder to replicate

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

EasyJet is turning improved customer service into bundles of cash. The numbers are especially impressive in the context of the millions being lost by many of Europe’s legacy airlines on short-haul flights. It also makes a stark contrast with the low-cost rival Ryanair, which has issued two profit warnings since September.

Nov 5, 2013
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BMW profit miss just a bump on safe road

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

BMW shares tanked more than 3.5 percent on Nov. 5 after the carmaker released third-quarter earnings that fell slightly short of expectations. Investors should pause and relax. Even though earnings before interest and taxes are down 6 percent year-on-year, the results actually reflect the company’s strengths more than its weaknesses. Profit is down for a good reason.

Nov 4, 2013
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Ryanair shares still expensive despite rapid descent

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Ryanair is well known for the cheapness of its flights. But its shares are expensive and that remains true even after a 12 percent dive on Nov. 4.

Oct 30, 2013
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Porsche performance disguises VW’s weak spots

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Volkswagen is doing well. It increased operating profit by 20 percent in the third quarter. It reiterated its guidance for the full year. Cheerful investors pushed Volkswagen’s shares up by 4.5 percent on Oct. 30. But Europe’s largest carmaker cannot yet claim to be a high-performance vehicle.

Oct 16, 2013
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Merkel can build coalition with minor left turn

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Germany’s Green party has abandoned coalition talks with Angela Merkel, so the German chancellor is back to square one – and to the most credible option from the beginning: an alliance with the Social Democrats of the SPD party. Two-thirds of Germans favour such a “grand coalition”, which would control more than 80 percent of the seats in the Bundestag, the lower house of parliament.

Oct 14, 2013
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Split Nobel prize shows bubbles are worth watching

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By Olaf Storbeck and Viktoria Dendrinou

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Economics is the only field in which two people can share a Nobel prize for saying opposing things. This old joke, provoked by the 1974 prize that went to ideological antagonists Friedrich August von Hayek and Gunnar Myrdal, is proving relevant again. Eugene Fama, Lars Peter Hansen and Robert Shiller all worked on financial markets efficiency and drew separate, if not opposing, conclusions. This is a welcome reminder that the dismal science has few absolute truths to offer – mostly questions to explore.

Sep 23, 2013
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Merkel’s triumph maintains Europe’s muddle-through

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The German election has brought big shifts at home, but it will not shake up the country’s approach to European issues. Angela Merkel’s next government will look different to the last. However, it will be just as focused on structural reforms and fiscal discipline in the periphery. Europe’s muddle-through is not going away.

Sep 20, 2013
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Review: Merkel’s hidden European agenda

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Angela Merkel is usually described as an utterly pragmatic politician, lacking either strong convictions or a grand political vision. Stefan Kornelius, foreign editor of Germany’s Sueddeutsche Zeitung, takes issue with this view. In his biography of the German chancellor, published in English on the eve of the Sept. 22 German elections, he claims that Merkel has a bold blueprint of Europe’s future. She just stays mum about it in public.