German economy hits a bump; WTO talks start; German gas prices drop; criminals cost the economy billions
Breaking the windows of a Gap store while demonstrating against the WTO
RWI forecast dampens earlier optimism
The growing confidence in the German economy following a positive ifo-Institute outlook report on Monday was already dampened by Tuesday. The Rhineland Westphalia Institute for Economic Research (RWI) lowered its prognosis for 2003, saying the economy will shrink by 0.2 percent. The German economy will first grow again in 2004, the institute predicted. Until then, RWI's prognosis lay at 0.5 percent growth. On Monday, hopes for a brighter economic future had been raised following an increase in the ifo business climate index for the third straight time. The ifo-Institute traditionally considers three increases or decreases in the economic barometer in a row to be a trend. The EU Commission reacted on Tuesday with "cautious optimism" to the ifo numbers.
WTO talks underway
Talks at a World Trade Organization meeting in Montreal on Tuesday centered on what flexibility the United States and the European Union may show with agricultural subsidies. Ministers from 25 countries met in a downtown hotel to hammer out a consensus on the divisive issues of farm subsidies and patented medicines for poor countries. Meanwhile, as a result of anti-globalization demonstrations, a total of 238 people were arrested, during which some shop windows and car windshields were smashed, police said.
German natural gas prices to drop
The EU Commission wants to see that natural gas prices drop in Germany. In the future, transport costs will be pushed lower as a result of new pipeline agreements, the EU Competition Commission said. Intensive negotiations are currently underway with Essener Ruhrgas AG, which controls more than 55 percent of the cross-regional pipeline network. And the Shell-ExxonMobil joint venture BEB is already pressuring the commission to allow greater competition for its own network. BEB owns 10 percent of gas pipeline capacity.
Business pays price for criminal activity
The German economy suffers damage in the tens of billions of euros due to illegal activity, according to the Association for Economic Security in Berlin. The agency came to that conclusion after gathering data from its members, some of the country's largest industry umbrella organizations. "The security situation for the German economy remains tense," the association said. The economy is directly and indirectly affected not only through general criminality such as break ins, theft, and robbery, but also through illegal economic activity, including investment fraud, corruption, espionage, Internet criminality, product- and software pirating and tax and customs fraud.
Celanese expects lower profits
Following a one-off profit jump in the second quarter, chemical concern Celanese is forecasting further poor results in the second half. Low demand, high raw materials and energy costs and the strong Euro will hurt results in the second half, the company said. Therefore, profits could be lower than in the same period the previous year.
Compiled with material from wire reports.