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Business

Business Briefs

EU says Germany not alone in violating budget rules; Random House buys out German publisher; despite rising unemployment a million jobs go unfilled; and China trumps Japan in German imports.

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Brussels says France, Italy and Portugal will join Germany in the list of deficit violators next year.

Germany not alone in EU budget violation

Germany will most likely be joined by three other euro zone countries in violating the EU’s Stability and Growth Pact. According to estimates by the EU Commission released Wednesday, France, Italy and Portugal are expected to run a risk of going over the three-percent deficit limit established for the common currency union. The Commission’s report, which examined the economic standing in each of the member states for the current quarter, shows the four countries failing to bring their deficit into the EU fiscal framework for this year and the next. In addition, the Commission said that the economy for the entire euro zone was not picking up growth as hoped, despite the ECB’s decision last month to lower interest rates. The report concluded that the strong euro, which has gained in value over the U.S. dollar in the last 18 months, was to blame for declining exports.

Random House buys German book publisher

German media conglomerate Bertelsmann said Wednesday its Random House book division will not take over all of German competitor Ullstein Heyne publishing due to antitrust objections. Instead, Random House will buy only the publisher’s paperback business, company spokesman Tim Arnold said. Random House, Germany's largest book publisher, announced in February it would buy Ullstein Heyne, the number 3, from Axel Springer Verlag for an undisclosed sum. German antitrust authorities, however, had warned the company that a full takeover of Ullstein Heyne's imprints would give Random House too large a share of the German paperback market - 40 percent, over the 30 percent mark set by the federal antitrust office. The whittled-down deal now leaves Random House with only 28 percent, Arnold said. Ullstein Heyne publishes German translations of best-selling American authors like Tom Clancy, Stephen King and John Grisham, and currently has two books on the German bestseller list.

A million unfilled jobs

Despite the more than four million people looking for work in Germany, there are still over a million unfilled jobs in the country. The Institute for German Economy (IW) said on Wednesday that around 62 percent of the vacant positions were reported by companies who had not registered the job opening with the employment office. Instead, these companies had relied on placing want-ads in newspapers, the Internet or private head-hunters to fill the positions. The Cologne-based institute said that 43,000 jobs remained unoccupied for more than six months last year. Jobs in the technical engineering branch were especially hard to fill.

China important for German exports

Last year China surpassed Japan as the most important market for German exports in Asia. German companies exported goods for a total value of some €14.5 billion euro to China, an increase of nearly 20 percent compared to the previous year, said the Federal Statistic Office in Wiesbaden. The Japanese market, in contrast, imported seven percent fewer German goods, bringing the total value down to just over €12 billion euro. The dip in Japanese trade means fewer German cars and car parts are finding their way to the island-nation. The Chinese market imports primarily German machines.

Good year for Hamburg airport

Hamburg’s airport weathered out last year’s industry-wide economic crunch and came out on top. Despite the overall economic downslide in 2002, which in the airline industry was compounded by a dramatic decline in sales following the Sept. 11, 2001, terror attacks in the U.S., the Hamburg airport reported pre-tax profits of €21.8 million. That’s up slightly from the €21 million for the previous year. The company’s shares in non-flight related business such as rent and leasing of airport space as well as concessions were largely responsible for the airport’s economic success.

Better business climate

Doing business in Germany improved slightly in the month of June compared to the previous month, according to a study published by the Munich Ifo Institute for economic research on Wednesday. The perception of the current economic situation in German companies was not quite as negative as in May, and the outlook for the future was in general less skeptical. The Ifo Institute reported that overall product demand had risen slightly, although the number of companies with low production orders was still high. Owing to the strong euro, German firms expect to see exports outside of Europe decline in the next months.