In its monthly bulletin issued yesterday, the Bundesbank said Germany has entered a phase of “clear, widespread and sustained decline” in its economy in the wake of rising energy costs for companies.
According to “French”, the “Bundesbank” wrote in a note overshadowed by pessimism, that “deflation indicators are on the rise” in the German economy, and are mostly caused by the “general conditions of economic supply, in particular energy supply, which deteriorated to a large extent following the Russian-Ukrainian war. ”.
The financial institution added that inflation, which continues to rise and approached 8 percent in August, and uncertainty about the future of energy supplies and prices, will hurt the “energy consuming” sectors. , which are particularly dependent on gas, affecting their exports and investments, as well as “private consumption” and service providers on which they depend.
After cutting off Russian gas supplies to Germany, on which it depended 55% before the war in Ukraine, the central bank warned that supplies would be “extremely difficult in the coming months”.
After GDP recorded a modest 0.1 percent increase in the second quarter of the year, the “Bundesbank” forecast a “significant reduction in the fourth quarter” and “most likely during the first quarter of next year”, without providing specific figures.
The economy is in technical contraction after recording two consecutive quarters of decline.
Joachim Nagel, the head of the central bank, issued a similar forecast in early September, noting the “possibility” of entering a deflationary state between the end of the year and the beginning of 2023.
“There are a number of elements” that point to this scenario, he said.
Last week, the Ifo Institute, one of Germany’s largest research institutes, predicted a technical contraction in the first quarter of 2023, with GDP down 0.4% after an expected drop of 0.2% in the fourth quarter of 2023. 2022.
In a context linked to the German economy, shipping brokers and commodity traders said yesterday that the water level of the Rhine River in Germany has risen thanks to recent rains, approaching normal levels before falling to low levels this summer. which have interrupted transport.
According to “Reuters”, the brokers added that due to expectations that dry weather will prevail for most of the week, the level could drop again and that the situation has not yet returned to normal. The Rhine is an important shipping route for commodities such as grain, minerals, coal, and petroleum products, including heating oil. Weeks of high temperatures and low rainfall in August lowered the water level in the river, Germany’s commercial artery, causing shipping delays and raising Europe’s costs by half a percentage point this year.
But the reference water level at Kaupp, a bottleneck near Koblenz, rose to 1.39 meters yesterday, up from just 32 centimeters in August. In order for the ships to sail fully loaded, a reference level of approximately 1.5 meters is required at Kaupe.
In the banking sector, a report in Germany revealed that the American bank “BNY Mellon” and the German “Hamburger Warburg Invest” are obliged to pay 60 million euros to the Federal Tax Office in Germany, “the tax authority” on the background of the great tax evasion scandal known as “KAM”. X “.
And the German newspaper, “Handelsblatt”, said that the two banks have implicit responsibility for the tax burden of the German equity fund “BC German”, managed by the bank “Varburg” in 2009. The company specializing in the deposit or custody in that moment was BHF Asset Servicing which was subsequently acquired by BNY.
Interestingly, “Varburg Invest” is a capital investment company of the “Hamburger Varburg” group.
A spokesman for German Deutsche Bank said the bank will participate in the amount, which will be paid by BNY, but did not provide figures. “It is still possible to reduce the final amounts relating to payments made by third parties,” he added.
The Bhf Depository Company was owned at the time of the incident by the Sal.Openheim Group which was acquired by Deutsche Bank in 2010, and a few months later the company was sold to BNY.
The CamX scandal is the largest tax scandal in German history, as it cost the German state billions of euros in losses, as a complex network of bankers, brokers and investors managed to loot the state treasury for decades without interference from the authorities. .
Banks and stockbrokers used to trade stocks before the dividend was due through so-called “CamX Strategies”, a series of trading strategies, designed to take advantage of tax differences across Europe, and some banks have played an important role in this. .
During the confusion caused by the alternating trading of these shares, the people involved in this scandal recovered unpaid taxes, which cost the German state treasury billions of euros in double-digit losses.
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