Tag Archives: Germany

International community hails Geneva talks on Syria

Foreign ministers of several countries welcomed the launch of talks in Geneva on Syria’s Constitutional Committee.

Top diplomats of the U.S., U.K., Germany, Jordan, Egypt and Saudi Arabia issued a joint statement late Thursday and saluted UN Secretary-General Antonio Guterres and UN Special Envoy for Syria Geir Pedersen for their efforts on Syria.

“We support efforts to create a safe and neutral environment that enables Syria to hold free and fair elections, under UN supervision,” the statement said, adding the political solution in the war-weary country should be based on UN Security Council Resolution 2254.

“We recall our statement in New York on September 26 and continue to call for an immediate and genuine nationwide ceasefire in Idlib,” it said, referring to opposition-controlled northwestern Syria.

Structure of Constitutional Committee

The committee is composed of two different bodies. The large body is made up of members from the opposition, regime and civil society whereas the small body includes 45 people responsible for the creation of the new national charter.

The drafts prepared by these 45 members must be approved by the large body, from which it must acquire a “yes” vote from 75% of its 150 members.

Notably, the committee includes two co-chairman.

Syria has been locked in a vicious civil war since early 2011, when the Bashar al-Assad regime cracked down on pro-democracy protests with unexpected ferocity.

Since then, over 5 million civilians have become refugees. Turkey hosts 3.6 million of them — more than any country in the world.

https://www.aa.com.tr/en/politics/international-community-hails-geneva-talks-on-syria/1632483

Korean Investors Lose 98.1% in German-Rate Bets Gone Very Wrong

South Korean investors in a derivative product tied to German sovereign bonds lost 98.1% of their principal, highlighting the danger of super-risky assets sold to individuals that regulators are now probing.

The product, whose value was linked to the German 10-year government note yield, caused such big losses because the yield on the benchmark fell sharply to around minus 0.6%, according to Woori Bank, which sold it. About 8 billion won ($6.7 million) of the four-month securities matured on Thursday. There was 127 billion won of such securities tied to German rates that were outstanding as of Aug. 7, according to the Financial Supervisory Service.

Read more: Products Only a ‘Madman’ Would Buy Plague Koreans Seeking Yield

A Woori Bank spokesperson contacted by Bloomberg referred to a Sept. 23 statement, saying the firm will actively seek ways to protect their customers in dispute reconciliation.

The FSS is investigating whether enough information was provided to investors when such products tied to overseas rates were sold, and whether they had design flaws. Individual investors seeking higher returns as interest rates fell in Korea were the predominant buyers of those securities: they made up 89.1% of the about 822 billion won of overseas rate-linked products outstanding as of Aug. 7, the financial regulator said last month.

While the products have different terms, a typical one tied to German rates offer a return of 2% on six-month securities if the 10-year yield is minus 0.25% or higher, but if it falls below that level, investors lose 2.5% of their principal every time the yield drops one basis point, according to the FSS.

https://www.bnnbloomberg.ca/korean-investors-lose-98-1-in-german-rate-bets-gone-very-wrong-1.1322118

Germany criticizes Egypt’s repression on civil society

Germany on Wednesday criticized Egypt over repressive measures against media and civil society, in the wake of anti-government protests last week.

Germany was closely following recent protests in Egypt, said Rainer Breul, foreign ministry deputy spokesman, speaking at a news conference in Berlin.

“As we have already stated at the UN Human Rights Council last week, growing repression of civil society and free media would not contribute to the stability of Egypt,” Breul stressed.

“On the contrary, this might lead to radicalization and violent extremism,” he added.

Hundreds of protesters took to the streets in central Cairo and several other cities last week to protest President Abdel Fattah al-Sisi’s rule, economic hardships due to ongoing austerity measures.

Breul noted that more than 1,000 people were detained in the country, according to unconfirmed reports by human rights groups.

“The Federal Government [of Germany] expects that the Egyptian authorities would adhere to the principles of rule of law, and those who cannot be accused of committing a crime will be released immediately,” he said.

https://www.aa.com.tr/en/europe/germany-criticizes-egypts-repression-on-civil-society/1594189

Merkel: We will keep trying to find solutions with Iran to avoid escalation

Chancellor Angela Merkel said on Wednesday that Europe had decided to uphold the 2015 Iran nuclear deal and would keep trying to find solutions that averted escalation.

“Step by step we will keep trying to find solutions with Iran that prevent an escalation of tensions in a globally sensitive region. That’s our job,” Merkel told the lower house of parliament.

https://english.alarabiya.net/en/News/middle-east/2019/09/11/Merkel-We-will-keep-trying-to-find-solutions-with-Iran-to-avoid-escalation.html

Less than a year after Khashoggi: Germany to resume training of Saudi border guards

The German Interior Ministry confirmed, Monday, the resumption of the training mission of Saudi border guards after it was suspended last year after the murder of journalist Jamal Khashoggi inside the Saudi consulate in Istanbul.

Spokesman Stephane Roy Glosenkamp confirmed reports indicating Berlin’s decision to resume the training mission in Saudi Arabia, reported Associated Press.

Glosenkamp added that “the protection of borders in the Near East and Middle East serves the interest of Germany’s foreign policy, and it is an important means of effectively combating terrorism.”

He explained that the training focuses on “regulations aimed at border protection and quality management, as well as the detection of forged documents.”

German Foreign Ministry spokesman Rainer Breuil said that the training would include lectures on “principles of the rule of law and human rights”.

The statements came today after Der Spiegel, revealed on Saturday that the German authorities are making efforts in secret to resume its normal relations with Saudi Arabia, less than a year after the assassination of Khashoggi.https://www.middleeastmonitor.com/20190910-less-than-a-year-after-khashoggi-germany-to-resume-training-of-saudi-border-guards/

German police suspend training in Kabul after attack

German police have suspended the training of Afghan officers in Kabul in the wake of last week’s deadly attacks by the Taliban, it was confirmed on Sunday.

At least 16 people were killed and more than 100 injured last Monday in a bomb attack on Kabul’s Green Village, a large fortified compound that houses aid agencies and international organizations.

The 22 members of the German Police Project Team (GPPT), in Kabul to train Afghan officers, were in the compound at the time and survived the attack, but their accommodation and offices are “no longer habitable,” a spokesman said.

As a result, German police have suspended the training, with half of the team flown out of Afghanistan while the rest are housed in Kabul’s German Embassy.

“The other half of the members of the… GPPT are flying out for the time being for a lack of accommodation,” an interior ministry spokesman said in a statement from Berlin.

“The question of the continued ability to work is currently being clarified,” the spokesman said.

He said “The continuation of the successful cooperation with the Afghan security authorities also depends on this.”

After another deadly bomb attack killed 12 more in Kabul last Thursday, US President Donald Trump announced that he had called off a secret summit with the Taliban, following a year-long diplomatic push to exit America’s longest war.

https://english.alarabiya.net/en/News/world/2019/09/08/German-police-suspend-training-in-Kabul-after-attack-.html

German Foreign Minister Maas arrives in Sudan

German Foreign Minister Heiko Maas arrived Tuesday in Sudan which is ushering in a long-awaited transition from decades of autocratic rule under ousted leader Omar al-Bashir.

The visit by Maas comes after Sudan swore in a new prime minister and a civilian-majority ruling body to steer the country through a three-year transitional period.

The steps toward transition are part a power-sharing deal signed on August 17 by an umbrella group that led months of protests against veteran leader Bashir, and the generals who seized power after ousting him.

“Sudan stands at a turning point of its history,” Maas said in a statement ahead of his visit.

The top German diplomat is expected to meet with the newly-appointed Prime Minister Abdalla Hamdok and the head of Sudan’s ruling body, General Abdel Fattah al-Burhan.

Maas said he was looking forward to holding talks with representatives from the protest movement “to express my highest appreciation to them.”

“We want Sudan to be able to seize this historic chance and, after years of isolation, to receive the necessary support from the international community,” he added.

Sudan has long suffered a pariah status especially due to its listing by the United States as a state sponsor of terrorism since 1993.

The designation has damaged its economy and hampered foreign investment.

After his visit to Sudan, Maas is due to head to the Democratic Republic of Congo.

https://english.alarabiya.net/en/News/middle-east/2019/09/03/German-Foreign-Minister-Maas-arrives-in-Sudan-.html

Swiss Economy Probably Expanded 0.2% in the Second Quarter

The Swiss economy is forecast to have grown just 0.2% in the second quarter, with data due to be published on Thursday. Yet Germany, it’s biggest export market, is on the brink of recession, hit by the trade war and a slump in manufacturing. Combined with the strong franc, that’s likely to weigh on economic momentum in Switzerland in coming months.

https://www.bnnbloomberg.ca/swiss-economy-probably-expanded-0-2-in-the-second-quarter-1.1310137

Czech Craft Beer Makers Brew for Brexit

The tiny craft brewery in a quaint Czech village near the border with Germany and Poland is perhaps an unlikely place to be plotting a Brexit strategy. 

Co-owner Viktor Tkadlec is betting his “clean taste without foreign additives” will help him elbow into the crowded U.K. market even after it leaves the European Union. Cvikov Pivovar is part of a group of Czech brewers aiming to break into Britain even as the country risks crashing out of the EU at the end of next month without any agreement to keep trade flowing. 

“The U.K. market is very competitive and every pub has 10 to 15 types of beer,” said Tkadlec, who exported “tens” of barrels to British pubs in a test run this year. “We’re not an export brewer and we’ve never had that goal. But let’s see how it goes.”

While much of the Brexit focus has been on multinationals navigating potential customs barriers, the effort by Czech craft beer producers shows how Britain’s tortuous departure from the EU is resonating across the continent.  

The Czech Beer Alliance was started by Filip Celadnik, a Czech lawyer living in London. He first teamed up with the state-run CzechTrade’s U.K. office to ship high-quality premium lager to Britain before the 2016 referendum on leaving the EU. Following the vote, there was some soul searching. Celadnik and CzechTrade U.K. head Martin Macourek then pushed ahead and gathered eight small-time brewers under the slogan “Real Bohemian Lager” earlier this year.

“It’s a very challenging time,” Macourek said. “We thought we would wait, but then we waited for a year and Brexit did not happen so we said, ‘Let’s do it.’ Otherwise we would be waiting for ages.”

Read More: Hong Kong’s Li Bets on Pubs Surviving Brexit

It’s not the prospect of higher tariffs following a no-deal Brexit the group should be worried about, but an economic meltdown and widening unemployment, according to analysts. Even without Brexit, Czech beer sales to the U.K., dominated by Pilsner Urquell, Staropramen and Budvar, fell last year almost 10%.

British Prime Minister Boris Johnson faces a showdown with parliament this week over his plan to keep the possibility of leaving the EU without a deal with Brussels. Allies of Johnson are considering a snap general election while his critics are drafting a new law to force him to delay Brexit by three months.

The Czech craft beer makers have a mountain to climb because of Brexit, said Spiros Malandrakis, the industry manager for alcoholic drinks for Euromonitor in London. “In normal times it would be a great marketing trick,” he said. “The story is right, but the timing is wrong. They can try to spin it, but we have to separate reality from spin.”

In the first three months of this year, with a small batch of targeted placement, the alliance sold 500,000 koruna ($21,160) worth of lager to local pubs. Celadnik and Macourek estimate that sales may reach 4 million koruna in its first year after Brexit.

Wandering through a maze of pipework, steel barrels and pools of fermenting wort in the brewery basement, Cvikov brewer Tkadlec said he is glad to be part of that effort.

He said that he didn’t know how much of his batch being brewed at the moment will go to the U.K. But he hopes that Britain will eventually become a larger part of his total sales.

“It’s all about beer – good beer – the best in the world,” said Tkadlec.

 https://www.bnnbloomberg.ca/czech-craft-beer-makers-brew-for-brexit-1.1310125

A German Tax Case Is Putting the Entire Finance Industry on Trial

 Germany’s most convoluted tax case in recent memory gets a human face this week when two former investment bankers make their debut in court. But more than the duo’s dealings, it’s the role of the financial services industry at large that will come under scrutiny.

The two men, Martin S., 41, and Nicholas D., 38, are charged with helping orchestrate transactions in the latter part of last decade involving corporate shares and their dividends that resulted in more than 400 million euros ($443 million) in tax losses. Both are cooperating with authorities in a bid to avoid jail time.

The former bankers will be equal parts defendants and star witnesses in a trial starting Sept. 4 that’s been one year in the making. Their case is part of a previously widespread trading practice across the industry known as Cum-Ex. Lawmakers estimate the financial engineering cost the government more than 10 billion euros in lost revenue, a shortfall the treasury is keen to recoup from those involved.

“It’ll be a pilot case that’ll write legal history and break ground for others to come,” Gerhard Schick, a former German lawmaker who has followed the Cum-Ex case for years. “The criminal clean-up is finally entering its crucial phase.”

Dividend Tax

The charges were brought by Cologne prosecutors, who are leading the biggest of several Cum-Ex investigations in Germany. Hearing the case is a court in nearby Bonn, home to a special tax authority that’s handling issues involving foreign investors.

Cum-Ex transactions, spawned from various forms of dividend stripping, relied on the sale of borrowed shares just before a company was scheduled to pay dividends. This allowed more than one investor to claim a refund on a tax that was normally paid only once, effectively double-dipping at the expense of the state.

Given the complexity and high volumes involved, Cum-Ex required participation from many players. They all profited one way or the other from the deals, the cooperating suspects have told investigators, according to court documents viewed by Bloomberg News.

There’s potentially much to gain from helping authorities shed light on the dealings, given the outsize financial damages involved. Under German law, schemes with tax losses exceeding 1 million euros usually carry jail time with no suspension possible — the higher the amount, the longer the term. At the same time, cooperation can help reduce or even get a prison sentence waived altogether.

Representatives for the two men — who are both British citizens — declined to comment. They could only be identified by their first names due to German press law.

Long List

In one of the most closely followed German tax cases, FC Bayern Munich President Uli Hoeness was given a 3 1/2 year prison sentence in 2014 for evading evading 28.5 million euros in tax — a fraction of the sum involved in the Bonn case.

The indictment lists 34 cases that prosecutors pieced together, and the account reads like a who’s who of the financial services community. Cum-Ex transactions required the finely-tuned collaboration of an entire industry: a buyer taxable in Germany, as well as short sellers who borrowed the stock from pension or investment funds, along with trading desks at investment banks and brokers who facilitated the deals.

Martin S. told investigators that next to vehicles set up for the purpose of buying stock, some German lenders also fulfilled that role — among them private bank M.M. Warburg & Co. and some regional banks. The short sellers were often investments banks, including Macquarie Group Ltd., Barclays Plc, and Banco Santander SA, a role also taken by Royal Bank of Scotland Group Plc, Morgan Stanley and Merrill Lynch & Co, according to other witnesses.

Among investment banks that lent stock, cooperating witnesses cited Deutsche Bank AG, State Street Corp., and Sweden’s SEB AB. Brokers included Tullett Prebon Group Holdings Plc and ICAP. Banks were allegedly also among the investors funds in funds that did Cum-Ex transactions.

In some of the cases selected for the charges, Deutsche Bank and Merrill Lynch acted as prime brokers for funds that did trades. Deutsche Bank, BNP Paribas SA and BHF, a company later acquired by Bank of New York Mellon Corp, were among lenders which acted as custody banks, issuing crucial tax certificates.

In response to questions from Bloomberg, Deutsche Bank said that unlike many competitors, it didn’t do Cum-Ex trades on its own account. However, the bank was involved in clients’ Cum-Ex transactions, including typical banking services such as financing securities transactions

Cooperating Witnesses

Warburg said it never sought double refunds and never intended do to transactions to that aim. Santander referred to its interim report stating it’s being investigated and is cooperating with authorities. SEB said it was a market participant in securities lending but has no information about lending to short sellers involved in Cum-Ex.

State Street said it’s cooperating with the authorities as part of an ongoing inquiry. TP ICAP PLC, the company formed after Tullett Prebon acquired ICAP, referred to its latest report that states Frankfurt prosecutors are investigating three former ICAP employees and have opened proceedings against the German ICAP unit. RBS, BNY Mellon, Merrill Lynch, Macquarie, BNP and Morgan Stanley declined to comment, while Barclays said it had no immediate comment.

For the trial scheduled to last into January, a handful of other cooperating traders and one lawyer have signaled their willingness to testify and disclose what they know to help authorities pick off the big names. One of the cooperating witness to be called is a former Macquarie employee. He told investigators that the Australian lender took on various roles, including buyer and short seller, according to the court documents.

A challenge in these types of cases is where to draw the line between providing legitimate help in transactions and complicity in tax crimes, said Heiko Gemmel, an attorney at Hogan Lovells in Dusseldorf who advises clients on the issue. Not everyone touched by the wide-ranging practice necessarily committed a crime, he said.

“A lot of people in the financial industry will follow the proceedings with bated breath,” said Gemmel. “The outcome of this trial will likely determine the trajectory of other cases.”

https://www.bnnbloomberg.ca/a-german-tax-case-is-putting-the-entire-finance-industry-on-trial-1.1309856