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Mistakes French bank Societe Generale made with acquiring a controlling stake in Greek bank Geniki. Credit Agricole bank had a similiar experience with its stake in Greek bank Emporiki. In 2010 Societe Generale was forced to set aside 400 million euros for bad loans. Credit Agricole had to remove the CEO and higher executives in 2009 before introducing good loan criteria at Emporiki. Today Emporiki has loan loss provisions of 12.5% of gross loans, and Geniki has 21%, according to analysts. Dirk Hoffmann-Becking, analyst at Bernstein Research, estimates that a default that took out 30% from the value of these Greek banks loan book and 70% from Greek government bonds would result in a loss of 3 quarters of earnings for Credit Agricole and for Societe Generale 1.5 quarters of earnings. This would mean that the French banks would take 3 quarters longer to get their capital reserve ratios to 9% for new Basel III regulations.

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Corio NV, a Dutch shopping centres company, has invested 600 million euros in Turkey after entering that market in 2005, with a strategy of introducing modern shopping centres to Turkish consumers. It has concentrated on secondary locations outside of Ankara and Istanbul, and encountered different cultural pattern of consumers there; with Turkish women in these cities not doing much driving, and mostly male shoppers. And women in these secondary cities do not buy the same forward fashion as women in Istanbul or Ankara. The Turkish real estate market and the economy is also relatively weak, and Corio is expected to take a loss of 15% on its investments since 2005, according to analysts. This also shows how markets in the bigger cities in emerging markets do not reflect life in the secondary cities. And competition is already intense in the bigger cities. Corio had to provide transportation to help women get to the malls.

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Efforts being made to convince the Spanish government of Mariano Rajoy to accept IMF aid to recapitalize its banks. The IMF released information showing Spanish banks would need to raise at least 37 billion euros or $46 billion to prevent a worsening of the banking crisis. The report was released before the meeting of EU finance ministers on June 9-10 to persuade the Spanish government to accept IMF aid. The eurozone bailout fund was given powers in 2011 to make loans to governments for the purpose of recapitalizing banks, with conditions and terms set for the financial sector not for the government's spending plans. According to people aware of the discussions taking place in the European Commission and the IMF, one option is to have the European Banking Authority and not the IMF oversee the program. This avoids the usual stigma of accepting aid coming from the IMF with strict conditions attached including restrictions on the government's fiscal plans.

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BMW lags Mercedes in return on sales its 6% vs Mercedes 8%. And it faces higher costs in meeting new EU emissions standards.Mercedes is doing a lot better now that it has gotten rid of the Chrysler distraction. One way is to develop new hybrid and other fuel economy and lower emissions technology in alliance with Daimler. Its developing a new hybrid engine with Daimler and GM of which a model was shown at the Frankfurt Auto Show. Improving profitability to have an 8%-10% return on sales by 2012 is the goal of BMW and it hopes to achieve this with a plan to create costs savings of 6 billion euros in a five yer plan announced by CEO Reithofer. in September 2007. This will mean thousands of layoffs and will mean that it will affect those with temporary contracts first and will include some buyouts also. BMW sales are growing and could reach 1.8 million by 2012.

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Rachel Donadio and Liz Alderman of the New York Times interview Alexis Tsipras, leader of the Syriza party that is expected to win the June 2012 elections in Greece. He says his party calls for suspension of payments on loans for 3 years till Greece's economy recovers, and renegotiation of the agreements that require large layoffs in the public sector and other austerity measures.

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An exceptional account by Melissa Eddy of how Germans are reacting to the German government's underinvestment in childcare centers. Germany's cabinet approved a bill that provides $190 monthly child care allowance for mothers who opt not to use day care centers provided by the government. This is supported by the Bavarian party, Christian Social Union, on the grounds that it gives an alternative to mothers to use private day care or nanny care. In practice many of the mothers using the allowance are expected to be lower paid workers who may decide not to work. The government has budgeted $500 million for the allowance for 2013. This is opposed by all opposition parties , and in a rare show of unity by business employer associations and unions, both say it "creates a false incentive to quit work." Axel Plunnecke of the Cologne Institute for Economic Research, says studies show low income families are among those who benefit most from early childhood education. About 100,000 lower qualified and lower paid workers could see this as attractive and quit working. The western part of Germany lacks enough child day care slots, so this is seen as not investing enough where its most needed, and Germany lags behind other countries like France in day care centers. The government is investing $15 million over five years to expand the number of child care centers. The goal is to have 750,000 child care slots by 2013, according to Ms. Kristina Schroeder, the family minister, herself a mother giving birth while in office. The measure was vigorously debated and controversial from the beginning because most many Germans see the $15 million years over 5 years as underinvestment in vital educational infrastructure. The $500 million is better invested in building modern day care facilities, they believe, especially because the children from lower income mothers not benefitting from daycare facilities will still need educational help, and German industry needs more women in the labor force to be competitive. Five years ago under reforms of parental support the 3 years of help to mothers was reduced to 1 year, resulting in an increase in the numbers of women working from 32% in 2002 to 40% by 2011, according to the Ministry of Family Affairs, Senior Citizens, Women and Youth....

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Losses at Sachsen LB amounted to about 17 billion euros linked to conduits that invested in subprime securities.

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England just had to stay calm, after Denmark went ahead 1-0 in the first 30 minutes, says this analysis of the Euro soccer semi final game with Denmark. Coach Southgate remained calm and had his players settle down. Eventually the stronger English bench wore the Danish players down. Harvey Kane scored on a penalty kick in the first part of extra time. Jack Grealish, Jordan Henderson, and Phil Foden were brought in and provided the energy on the English side that eventually prevailed. With the better overall bench and team England had to learn the lesson of staying calm through the early part of the game so that their deeper skills in the game could find expression.

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Germany's National Statistics Office reports the country showed a budget surplus of 36.6 billion euros in 2017. The economy expanded at 2.2%, the highest growth since 2011. Export growth was strong with exports up 2.7 percent in 2017.

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This report looks at the idea of jointly issuing debt for nonrepayable aid of 390 billion euros for the recovery fund for Europe. This goes to aid the countries hardest hit by the pandemic including Italy, Spain, Portugal, Greece, Poland.

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The lack of trust in negotiations on the terms of spending cuts between Greece and EU ministers in February 2011. In difficult exchanges between German finance minister Schauble and Greece's finance minister Venizelos, Schauble criticized the Greek government for not beginning negotiations for reduction in the minimum wage. EU ministers at a meeting with Venizelos on Feb 10, 2012, showed a distrust of Greece's figures on austerity cuts and asked for an additional $428 million in cuts to make up for the refusal of Greece to cut supplemental pensions. In Greece five ministers in the Greek cabinet resigned in protest over the conditions set by the troika of the EC, ECB and the IMF, just as unions launched a 48 hour strike in Athens. Greece is in the fifth year of a recession with unemployment at over 20%, making sharp cuts more painful. A shrinking economy makes achieving budget defict targets even more difficult and worsening the debt situation.

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This Nov. 2015 assessment by Economist magazine of Angela Merkel's 10 years as leader of Germany gives a rare glowing account of her leadership. Some failings including the slowness in tackling the early period of the eurozone economic crisis, but recovering through boldness as the crisis developed, and showing boldness in providing leadership for Europe both in the Ukraine crisis and the refugee crisis. It finds Cameron, Renzi and Hollande lacking in leadership qualities needed for Europe to thrive, and looks to Merkel's leadership for Europe's future progress.

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The NYT's Jonathan Kandell offers an indepth look at former German Chancellor Helmut Schmidt, who succeeded SPD leader Willy Brandt. Schmidt was from a working class neigborhood in Hamburg. Schmidt fought in the Germany army on the eastern front and the western front. He was a prisoner of war in a British camp in 1945. From 1946 to 1949 he studied politics and economics at the University of Hamburg. Both his father and wife were schoolteachers. He joined the SPD party during this period and worked for the Hamburg city government in various positions before being elected to the Bundestag, the German parliament in 1953. He returned to city government and supervised the response to a flood from the overflowing Elbe river in 1961 with extraordinary vigor. When Brandt was elected chancellor in the Social Democrat government in 1969, Schmidt was made defense minister, making improved relations with the Soviet Union and East Germany (German Democratic Republic or GDR) a priority, at the same time supporting the stationing of American nuclear missiles in Germany. In 1972 Schmidt became finance minister, and in 1974 he succeeded Brandt as chancellor. Schmidt and Giscard D'Estaing, the French president helped setup the European Council, and made the early efforts that led to the common Euro currency of the European Union, Schmidt's main achievement. By 1982 the Social Democrats party was divided following Schmidt's support for stationing nuclear missiles in Germany, and a parliamentary vote led to the fall of the Schmidt government. Kandell describes Schmidt as overconfident, not willing to listen to criticism. Some of Schmidt's popularity in Germany he attributes to Schmidt's wife Loki, a botanist with a likable personality. Later assessments of Schmidt in the media make references to Schmidt's frequent cigarette smoking right up to the end....

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Boudreaux and Bjork of the WSJ interview Mariano Rajoy, prime minister of Spain, in September 2013. Rajoy says he used to look at an app on the iPad hourly for changes in Spain's borrowing rates at the height of the banking crisis and found it a bit stressful. He hopes the current improvements in the economy will not stall the progress towards a closer union and setting up the financial architecture for the euro which puts the financial strength of the EU countries behind EU banks. Rajoy would like to see a banking union. He sees Spain's banking system not needing a bailout in 2014 and the changes having improved transparency, and capitalization of Spain's banking system. Other signs of improvement are increase in exports, a historic high in tourism revenues as a record is being set for the number of tourists visiting Spain in 2014, lower labor costs, and a current account deficit that reached 10% of GDP now in surplus.The 3rd quarter of 2013 brought an increase of 0.1% to 0.2% increase in GDP. If maintained this represents an annualized growth of 0.4% to 0.8% in GDP. GDP has declined 7.5% in the last 3 years. Rajoy expects GDP to go up 0.5% to 1% in 2014 and jobs being created but the progress only gradual. The government will consider further improvements for a flexible labor market. Increases in pension payments will not automatically be indexed to inflation for Spain's 9 million pensioners in 2014 as part of expected changes. Electricity rates will also not be indexed to inflation. Rajoy's main worry now is that there is a shortage of credit to increase household spending and the dire need for job creation....