Delicate balancing act
Chancellor Angela Merkel is an increasingly lone voice. Several eurozone governments have fallen and the change of president in France has threatened to put pay to austerity politics.
The eurozone crisis has proved to be a sprawling saga that matches anything staged at Bayreuth. Germany, our chief protagonist, rests on the laurels of continuing growth led by robust exports. But the demons of political instability lie lurking in the wings and threaten to blight the feast.
Germany remains the centre of stability in the eye of the eurozone storm – but it has challenges of its own. This special report looks at critical developments, including the problems faced by auto manufacturers as they deal with increased competition, energy...Read more
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Chancellor Angela Merkel is an increasingly lone voice. Several eurozone governments have fallen and the change of president in France has threatened to put pay to austerity politics.
Removed from the fierce competition among the global financial centres, Frankfurt’s raison d’etre is to serve the German real economy, currently the brightest beacon of hope for European growth. Most global banks have a presence there, yet the city retains a village-like charm.
German car manufacturers dominated the corporate primary market at the start of the year and now have the luxury of reacting to market conditions rather than their funding needs.
With German Pfandbrief issuance seemingly getting worse, hopes from German investors that issuance will be picked up by France and Scandinavia look unlikely.
The agency has stood in a league of its own – if any agency is going to be able to withstand the turmoil in Europe this year, it’s KfW.
When the German government shut down much of its nuclear capacity after last year’s Japanese earthquake and tsunami, many predicted a boom for renewables in general and solar power in particular. It hasn’t worked out that way.
Despite the headline-grabbing prospects of green energy, new conventional power plants will be needed to meet German demand but indebted utilities may be reluctant to invest and some are issuing exotic hybrid bonds to address shaky finances.
Germany’s equity capital markets dominated Europe in 2011 with proceeds more than twice that of runner-up Italy, even though the largest IPOs never happened. The pipeline remains bloated with multi-billion euro IPOs which will ensure this is repeated in 2012 – as long as further crises can be avoided.
The German syndicated loan market continues to be a favourite among German and foreign banks thanks to the country’s stable economy in the ailing eurozone and blue-chip companies that supply the loan market with jumbo deals.
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