Business Briefs | Business| Economy and finance news from a German perspective | DW | 18.02.2003
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Business Briefs

German Economy caught between hope and despair, Deutsche BA and EasyJet negotiate wages, German government to save defense industry from selling out, Deutsche Post teams up with Cisco Systems.


Starting problems -- EasyJet's takeover of Deutsche BA has run into trouble

German Economy caught between Hope and Despair

Investor confidence in Germany rose for the second month in a row in February, data showed on Tuesday, though not enough to dispel fears elsewhere in the economy that a possible war in Iraq might tip the country into recession. One of Germany’s key confidence barometers calculated by the ZEW European economic research institute showed that confidence among financial analysts and institutional investors is actually rising. At the same time, a separate survey among German companies conducted by the German federation of chambers of commerce DIHK showed Tuesday that company bosses are not feeling quite so confident and fear recession. In its poll, DIHK found that only 18 percent of those surveyed were counting on an improvement in the economy this year, 42 percent expected the economy to stagnate and 40 percent were forecasting further deterioriation. The DIHK survey found that economic improvement was still not in sight at the beginning of 2003. The survey concluded that domestic demand was weak and hopes that exports could at least keep the German economic motor ticking might also prove illusory in the event of a prolonged war in Iraq.

Deutsche BA and Cockpit negotiate Wages

Disputes over pay between Deutsche BA employers and pilots entered a new round of talks in Munich on Tuesday. The heated discussions are threatening the takeover of the loss-making German arm of British Airways -- Deutsche BA -- by British-based EasyJet. The low-cost British airline is only willing to take over Deutsche BA if its pilots and staff accept flexible working hours and EasyJet’s wages. Although many of the pilots were willing to accept a change in conditions, the powerful pilots' labor union, Cockpit, objected to all wage plans issued so far, Deutsche BA executives said Tuesday. EasyJet has an option to purchase Deutsche BA -- Germany's second-biggest domestic airline -- before July 3, 2003.

Government Tries to Save Defense Industry from Sell-Out

The German government intends to make it difficult for foreign corporations to take over German weapons manufacturing firms. The initiative is a reaction to the sale of a submarine company to a U.S. financial investor connected with defense enterprises, German business daily Handelsblatt reported Tuesday. In order to prevent German weapons industry from selling out, sales of such companies will now be under government review as soon as a foreign buyer acquires more than 25 percent of the company. According to a spokesman at the Federal Economics and Labor Ministry, foreign corporations that already have more than a 25 percent stake in German defense firms, will in future also have to ask for permission to enter German markets, the Handelsblatt reported. German industries were critical of the government initiative. Protectionism was no solution for the German economy, a spokesman of multinational aerospace and defense giant EADS, the European Aeronautic and Space Company, told the Handelsblatt.

Deutsche Post teams up with Cisco Systems

German postal service provider Deutsche Post announced Tuesday the company will team up with Cisco Systems, worldwide market leader in web network solutions. Cisco is supposed to help Deutsche Post set up a strategic partnership in information technology and better data system efficiency, the German company said in a statement. Among the core projects are web-supported solutions for internal finances and in-house communications, Deutsche Post said.