BERLIN, Nov 24 (Reuters) – German business sentiment rose unexpectedly in November for the first time in nearly half a year, suggesting Europe’s largest economy is weathering the euro zone debt crisis and turmoil in international markets better so far than experts had feared.

A day after weak demand for a German bond auction raised concern the crisis may be spreading to Europe’s economic powerhouse, the closely-watched Ifo business climate index bucked expectations to rise for the first time since June.

The Munich-based Ifo think tank’s business climate index, based on a monthly survey of 7,000 companies, edged up to 106.6 in November from 106.4 in October. The median forecast in a Reuters poll of 43 economists had been for a drop to 105.1.

The news pushed up the euro and European shares, providing some relief after Wednesday’s poor Bund auction when the German debt agency could not find buyers for almost half a 6 billion euro bond sale. Analysts called the auction of 10-year bonds a “disaster”.

Ifo economist Klaus Abberger told Reuters that the November index showed the debt crisis had not yet reached Germany’s real economy and that the country had good chances of avoiding recession this winter, with domestic demand looking stable.

“A slowdown will come but not a drastic one. We are not in free-fall,” Abberger said.

The firms surveyed by Ifo reported stable current business conditions while their expectations improved slightly.

BERLIN, Nov 23 (Reuters) – A “disastrous” German bond sale on Wednesday sparked fears that Europe’s debt crisis was even beginning to threaten Berlin, with the leaders of the euro zone’s two strongest economies still firmly at odds over a longer-term structural solution.

Financial markets were also unnerved by newspaper reports that Belgium may be pressing France for an expansion of a 90 billion euro ($120 billion) bailout of failed bank Dexia .

On top of this, a special report by Fitch Ratings suggested France had limited room left to absorb shocks to its finances like a new downturn in growth or support for banks without endangering its cherished AAA credit status.

After one of the least successful debt sales by Europe’s powerhouse economy since the launch of the single currency, the euro fell and European shares sank to 7-week lows.

The Bundesbank was forced to retain almost half of a sale of 6 billion euros due to a shortage of bids by investors{ID:L5E7MN1K2]. The result pushed the cost of borrowing over 10 years for the bloc’s paymaster above those for the United States for the first time since October.

“It is a complete and utter disaster,” said Marc Ostwald, strategist at Monument Securities in London.

One senior ratings agency official said the rise in its own borrowing costs could even give Germany a pause to re-examine its refusal to embrace a broader solution to resolve the debt crisis.

BERLIN (Reuters) – Germany and France clashed on Wednesday over whether the ECB should take bolder steps to stem the euro zone debt crisis, with Chancellor Angela Merkel issuing one of her starkest warnings yet against fiddling with the central bank’s strict inflation-fighting mandate.

In a forceful speech to the Bundestag lower house of parliament, Merkel also hit back at proposals from the European Commission on joint euro zone bond issuance, calling them “extraordinarily inappropriate.”

One of Germany’s worst bond sales since the launch of the euro on Wednesday hinted that the two-year old crisis was beginning to threaten the bloc’s paymaster, with the Bundesbank having to buy almost half of the 10-year bonds on offer.

But the public jousting underscores just how divided European leaders are on how to resolve turmoil which has accelerated to engulf big countries like Italy and Spain, and pushed out leaders in Rome and Athens.

“The European currency union is based, and this was a precondition for the creation of the union, on a central bank that has sole responsibility for monetary policy. This is its mandate. It is pursuing this. And we all need to be very careful about criticizing the European Central Bank,” Merkel said.

“I am firmly convinced that the mandate of the European Central Bank cannot, absolutely cannot, be changed.”

Shortly before she began speaking, French Finance Minister Francois Baroin offered a polar opposite view on the ECB’s role, telling a conference in Paris that it was the central bank’s responsibility to sustain activity in the currency bloc.

BERLIN, Nov 18 (Reuters) – The leaders of Germany and Britain sent out conflicting signals on Friday about how to solve the euro zone’s debt crisis and admitted they had failed to narrow differences over the introduction of a financial transaction tax in Europe.

At a news conference in Berlin, British Prime Minister David Cameron and German Chancellor Angela Merkel tried to paper over divergent views on European policy that have sparked a war of words between politicians and media in both countries.

But they could not mask differences over how the single currency bloc’s debt crisis should be handled, with Cameron calling for “decisive action” to stabilise the euro zone and Merkel making clear she favoured a “step-by-step” approach.

“My German isn’t that good, I think a bazooka is a superwaffe, am I right?” Cameron said in response to a question about his call for euro zone policymakers to use a “big bazooka” approach to the crisis.

“The chancellor and I would agree that whatever you call this we need to take decisive action to help stabilise the euro zone,” he said, citing the need for strong action on Greece, a rescue fund with “power and punch” and a recapitalisation of European banks.

Merkel struck a more cautious note. She has come under pressure to support bolder crisis-fighting steps from the European Central Bank (ECB), such as using it as a lender of last resort for the bloc or backstop for the bloc’s bailout fund, the so-called European Financial Stability Facility (EFSF).

So far she has resisted, backing the argument of the German Bundesbank that this would violate the ECB’s inflation-focused policy mandate. She is focusing on changes to the EU’s Lisbon Treaty to force other euro members to adopt German budget discipline.

BERLIN, Nov 18 (Reuters) – The leaders of Germany and Britain sent out conflicting signals on Friday about how to solve the euro zone’s debt crisis and admitted they had failed to narrow differences over the introduction of a financial transaction tax in Europe.

At a news conference in Berlin, British Prime Minister David Cameron and German Chancellor Angela Merkel tried to paper over divergent views on European policy that have sparked a war of words between politicians and media in both countries.

But they could not mask differences over how the single currency bloc’s debt crisis should be handled, with Cameron calling for “decisive action” to stabilise the euro zone and Merkel making clear she favoured a “step-by-step” approach.

“My German isn’t that good, I think a bazooka is a superwaffe, am I right?” Cameron said in response to a question about his call for euro zone policymakers to use a “big bazooka” approach to the crisis.

“The chancellor and I would agree that whatever you call this we need to take decisive action to help stabilise the euro zone,” he said, citing the need for strong action on Greece, a rescue fund with “power and punch” and a recapitalisation of European banks.

Merkel struck a more cautious note. She has come under pressure to support bolder crisis-fighting steps from the European Central Bank (ECB), such as using it as a lender of last resort for the bloc or backstop for the bloc’s bailout fund, the so-called European Financial Stability Facility (EFSF).

So far she has resisted, backing the argument of the German Bundesbank that this would violate the ECB’s inflation-focused policy mandate. She is focusing on changes to the EU’s Lisbon Treaty to force other euro members to adopt German budget discipline.

BERLIN (Reuters) – Angela Merkel and David Cameron will try to resolve clashing views on the euro crisis on Friday with London accused of being selfish for opposing a tax on banks and Berlin touching off British sensitivities about transferring power to Europe.

London wanted the prime minister’s visit to be low-profile, but such hopes were dashed after two lawmakers high up in Merkel’s ruling party blasted euro-outsider Britain’s stance in the days before the visit.

The chancellor told a congress of her Christian Democratic Union’s (CDU) this week that Europe faced its “toughest hour since World War Two”.

She wants to change the European Union’s Lisbon Treaty to impose German-style budget discipline, preferably on all 27 members of the EU rather than just the 17 countries in the euro zone.

“Plans for a possible treaty change are now at a very interesting point and we expect to exchange views with our British partners,” Peter Altmaier, chief whip of Merkel’s conservatives in the Bundestag, told Reuters.

But talk of treaty change has unnerved Cameron’s conservative-led coalition and touched a raw nerve in Britain about ceding more sovereignty to the European Commission in Brussels. It falls short of the “big bazooka” response Cameron has called for from Merkel.

Britain is especially worried Germany’s proposals for a tax on financial transactions — which it wants to introduce in Europe after rejection by the Group of 20 leading economies — would hurt London’s competitiveness as a financial hub.

BERLIN (Reuters) – Angela Merkel and David Cameron will try to resolve clashing views on the euro zone crisis Friday, after Berlin accused London of being selfish about Europe in comments that touched off British sensitivities about German bossiness.

The British government wanted a low profile for the eurosceptic Cameron’s visit – but such hopes were dashed by two lawmakers high up in Merkel’s ruling party blasting euro zone-outsider Britain’s stance in the days before the visit.

Merkel told her Christian Democratic Union’s (CDU) annual congress in Leipzig this week that Europe faced its “toughest hour since World War II.”

She prescribes altering the European Union treaty to impose German-style budget discipline, preferably on all 27 members of the EU rather than just the 17 countries in the euro zone.

“Plans for a possible treaty change are now at a very interesting point and we expect to exchange views with our British partners,” Peter Altmaier, chief whip of Merkel’s conservatives in the Bundestag, told Reuters.

But treaty change talk seems to irritate Cameron’s conservative-led coalition for two reasons: it falls far short of the “big bazooka” response he urges; and it touches a raw nerve about ceding more sovereignty to the European Commission in Brussels.

Britain is already that worried Germany’s proposals for a tax on financial transactions – which it still wants introduced in Europe despite rejection by the Group of 20 leading economies – would hurt London’s competitiveness as a financial hub.

LEIPZIG/BERLIN (Reuters) – Chancellor Angela Merkel’s conservatives urged her on Tuesday to step up the fight against right-wing extremists following the chance discovery that a group of neo-Nazis had been murdering immigrants for years.

Merkel has described as a national disgrace the existence of a cell, called the National Socialist Underground, whose members are now suspected of killing between 2000 and 2007 at least nine immigrants, eight Turks and a Greek, and a police woman.

The cell only came to light by chance, raising fears the security services have underplayed the threat from the extreme right and may have been distracted by its use of unreliable informants from the right-wing scene.

Police are reopening all unsolved cases with a possible racist motive since 1998.

The case has topped the national news since the weekend and politicians from all parties have expressed shock, which has also fueled calls for a renewed effort to ban the far-right National Democratic Party (NPD).

“You cannot help being left with the dreadful impression that the danger of right-wing extremist violence wasn’t taken seriously enough,” Thomas Oppermann, a member of the opposition Social Democrats (SPD), told the Sueddeutsche Zeitung daily.

Germany’s Nazi past makes right-wing militancy a particularly sensitive subject, yet experts have long warned of extremism among disenchanted young people in eastern regions of the country where unemployment is high and job prospects poor.

LEIPZIG, Germany, Nov 15 (Reuters) – The debt crisis sweeping southern Europe and lapping France is cause for alarm in Washington and Beijing, but not it seems for the rank and file of German Chancellor Angela Merkel’s party.

On the contrary, at a meeting of Merkel’s Christian Democrats the mood among delegates ranged from triumphalism over Germany’s economic strength to complacency about the crisis and blind faith in Berlin’s ability to shield Germany from it.

Merkel warned on the first day of the congress on Monday that Europe faced what could be its “toughest hour since World War Two”. But her message didn’t register with many of those in the hall or with the German media. Much press coverage focused on domestic issues – the minimum wage, childcare and education.

“We’re dancing on a volcano,” said Oswald Metzger, a CDU delegate from Baden-Wuerttemberg who is deputy leader of the party’s small and medium-sized business wing.

“Many of the people walking around here in Leipzig are divorced from the real economy and don’t understand the euro crisis nor the risks we face.”

Figures published on Tuesday showed the German economy grew 0.5 percent pace in the third quarter. Unemployment has fallen to its lowest levels since German reunification in 1990 and the smaller “Mittelstand” firms that form the backbone of Europe’s largest economy have strong order backlogs.

Many say they are not yet feeling the crisis that is hammering Greece, Portugal, Italy and Spain.

LEIPZIG, Germany (Reuters) – A senior member of German Chancellor Angela Merkel’s conservative bloc called on Britain on Tuesday to be less self-centred in its relationship with Europe despite not being a member of the single European currency.

“The British are not members of the currency union but they are members of Europe and they also have a responsibility for the success of Europe,” Volker Kauder, conservative leader in parliament, told the annual congress of Merkel’s Christian Democrats (CDU) in Leipzig.

Merkel and Finance Minister Wolfgang Schaeuble’s urgings that the European Union should rush through treaty changes for closer political union between its 27 members to underpin the currency put eurosceptic leader David Cameron in a quandary.

The prime minister, who will visit Merkel in Berlin on Friday, faced down a revolt by some of his own MPs last month who wanted a referendum on EU membership.

At the same time, Cameron has to encourage the 17-member euro zone to integrate further to avoid a currency collapse which would also be damaging for Britain, but said in a speech on Monday he is against Europe becoming too “rigid.”

Britain is especially concerned about Germany’s wish for a tax on financial transactions, which Kauder said would put the financial industry on the same footing as other sectors where “every coffee machine carries a sales tax of 19 percent.”

“The British don’t want this and I understand, when 30 percent of your gross domestic product comes from the financial market business in the City of London,” Kauder told the CDU in a speech that earned strong applause.