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Britain must avoid ‘fatal’ hard Brexit, European business leaders warn

برطانیہ کے یورپی یونین سے اخراج کے نگران وزیر ڈیوڈ ڈیوس نے کہا ہے کہ لندن میں ملکی حکومت برٹش پارلیمان کو یہ موقع دے گی کہ وہ بریگزٹ کے حتمی معاہدے پر ووٹنگ کر سکے۔ انہوں نے پیر کی شام پارلیمنٹ سے خطاب میں کہا کہ عوامی نمائندوں کو یہ موقع ملے گا کہ وہ بریگزٹ کے حتمی معاہدے پر بحث کرتے ہوئے اس کا تنقیدی جائزہ لے سکیں اور اس پر رائے شماری بھی ہو سکے۔ لندن حکومت کا یہ اقدام حکمران قدامت پسند پارٹی کے بریگزٹ کے حوالے سے باغی ارکان کو بظاہر کچھ رعایت دینے کی کوشش ہے۔

Theresa May has met European business leaders, who warned that a ‘no deal Brexit’ would be catastrophic. Fifteen business groups were in London to seek reassurance over the future of UK-EU trade. A hard Brexit would be “fatal” for industry, a group of leading European business representatives have warned Theresa May during talks in London on Monday. They urged the ... Read More »

Germany’s EU bill to rise by 16 percent post-Brexit: report

Germany will need to pay an extra €3.8 billion into the EU's coffers once Britain leaves the bloc. A new report, which is likely to rile German taxpayers, suggests France and Italy will face much lower budget hikes. Germany is being threatened with significantly higher contributions to the European Union's budget when Britain completes its departure from the bloc in 2019. The Funke-Mediengruppe newspapers on Friday cited a report by the European Parliament, suggesting that the Berlin government would suddenly be on the hook for an extra €3.8 billion ($4.2 billion), a rise of 16 percent. In 2016, Germany's net contribution — minus EU monies returned to fund projects in the country — amounted to €15.6 billion. By comparison, France would face an additional €1.2 billion per annum bill on top of its €5-6-billion net contribution, and Italy would pay an extra €1 billion. "Brexit does not just increase the financial burden for the EU-27, but also changes the distribution of that burden," the newspaper group cited the report as saying. Read more: 50 London banks in talks for post-Brexit move Germany, the Netherlands and Sweden currently benefit from reduced payments due to Britain's EU membership, it said. Britain is currently the second largest net contributor to the EU after Germany; its departure is expected to leave a €10.2-billion hole in the EU's finances. EU austerity needed? The EU study says discussions are underway about whether cuts should be made to the EU budget or whether new revenue sources can be opened up, including taxes. The budget gap revelations come as British negotiators meet with their EU counterparts in Brussels for the sixth round on Brexit talks, in an attempt to settle the country's financial obligations to the bloc. The EU has set a figure of €60 billion, while British officials have, to date, offered just €23 billion. On Thursday, the Financial Times cited an anonymous EU diplomat as saying that the UK government had been given a three week deadline to improve its offer. At stake is Britain's future trade deal with the EU, which Brussels has refused to discuss until the financial settlement has been finalized. Meanwhile, Germany's largest industry group BDI said on Friday that it would be impossible to reach a comprehensive deal on future economic relations between the EU and Britain within the two-year deadline. In doing so, it added its voice to growing calls for a transitional arrangement where Britain remains in the EU's single market and customs union for a longer period. Read more: Brexit: Why people are increasingly talking about the 'Norway model' The group last month told German firms in the UK to prepare for the possibility of a so-called hard Brexit, where Britain quits the bloc without a trade deal. BDI Managing Director Joachim Lang is due to meet British Prime Minister Theresa May in London on Monday. Despite talking up the possibilities of a transitional arrangement in recent months, Britain on Friday said it planned to enshrine its EU leaving date, March 29, 2019 into the Brexit law, which is currently being studied by parliament.

Germany will need to pay an extra €3.8 billion into the EU’s coffers once Britain leaves the bloc. A new report, which is likely to rile German taxpayers, suggests France and Italy will face much lower budget hikes. Germany is being threatened with significantly higher contributions to the European Union’s budget when Britain completes its departure from the bloc in ... Read More »

Offshore: The legal and the not so legal

The Paradise Papers data release shines a light on the tax activities of politicians and some of the world’s richest people. But it appears for now that most of the questions raised are ethical rather than legal. First it was the Panama Papers, now it's the Paradise Papers. The lid has well and truly been lifted on the exotic but shady world of offshore accounting, where firms serve some of the world's wealthiest and most powerful clients within whistling distance of martinis, marinas and docked pleasure craft. The massive 'Paradise Papers' leak, detailing some of the off-shore tax avoidance methods used by some of the world's richest and most powerful companies and individuals, mirrors the Panama Papers leaks of April 2016. Like with that dramatic data leak, the Paradise Papers story will dominate the news agenda for weeks and months and will bring embarrassment and intense scrutiny to people and firms long used to keeping troublesome secrets well out of the spotlight. But how much of what will be revealed, however startling, is actually illegal? Will the prevailing questions that arise be more ones of ethics and morality, rather than strictly ones of legal or regulatory probity? The law is an ass? The Panama Papers leaks lifted rocks all over the place that were, in the eyes of those who wanted them there, never supposed to be lifted. The implications were widespread and are still developing. Yet as then US President Barack Obama wryly noted at the time: "There is no doubt that the problem of global tax avoidance generally is a huge problem. The problem is that a lot of this stuff is legal, not illegal." Therein lies the rub — much of what has been revealed and will be revealed is, in the eyes of many, distasteful and unedifying, perhaps even immoral and unethical. But is it illegal? In most cases, no. Read more: Paradise Papers — what you need to know Take what has been released so far. Yes, around £10 million ($13 million, €11.3 million) of Queen Elizabeth II's money has been invested in companies in the Cayman Islands and Bermuda but as of yet, there is no suggestion that the law was broken. Likewise, the revelation that Stephen Bronfman — close advisor to Canadian Prime Minister Justin Trudeau — helped move millions of dollars to offshore accounts and funds is a question of ethics more than anything else. A high school economics student will learn that tax avoidance is legal whereas tax evasion is illegal and that's the line which offshore corporate service firms such as Appleby and Mossack Fonseca — the firms at the center of the Paradise and Panama releases respectively — have learned to tread so expertly over the last few decades. The Paradise Papers reveal not just those hiding wealth, but also the myriad and increasingly complex ways in which tax is being avoided and wealth is being hidden in offshore tax havens. Many of the 'investment' methods used in offshore are dizzyingly complex and labyrinthine, from methods designed to help an individual avoid paying tax on a private jet or superyacht to corporate structures of multitudinous dimensions, aimed at getting just the right amount of wealth into the right fund at the right time. The wrong kind of client But for how much longer can much of what has gone on remain legal? The storm that surrounded the Panama release and which will inevitably engulf the Paradise release means politicians will be put under increasing pressure to regulate what is becoming an increasingly problematic area. Yet it very much remains to be seen if any effective action will be taken. There are myriad legal and moral issues, beyond strictly literal taxation concerns, that arise as a result of the shady culture inherent in many tax avoidance schemes and structures. As the lead article accompanying the data release from the International Consortium of Investigative Journalists puts it: "While having an offshore entity is often legal, the built-in secrecy attracts money launderers, drug traffickers, kleptocrats and others who want to operate in the shadows. Offshore companies, often "shells" with no employees or office space, are also used in complex tax-avoidance structures that drain billions from national treasuries." Then there are the aforementioned ethical and moral issues that arise when powerful figures — particularly politicians or those with influence in the political world — are seen to be shepherding often obscene amounts of wealth out of the reach of their own national exchequers, whilst supposedly asking others to act in the national interest. The Panama Papers release prompted more than 300 economists to write a letter to world leaders urging a change in global taxation policy. "The existence of tax havens does not add to overall global wealth or wellbeing; they serve no useful economic purpose," they wrote. Another angle is the uncomfortable proximity the links reveal between the offshore firms and several less than savory foreign regimes. One of Appleby's clients for example was Glencore, a firm which secured mining rights in the highly corrupt Democratic Republic of Congo but which Appleby has not commented specifically on. Change we can believe in? The Panama Papers release prompted plenty of furrowed brows and much troublous wringing of hands on the part of politicians, from Barack Obama to David Cameron, and the Paradise Papers release has already set off several politicians across the world. The rhetoric which says "something needs to be done" is likely to continue. Yet the reality is that while much of what it is revealed through the data leak is ethically, morally and politically compromising, so far not much has been revealed to be illegal. Offshore tax havens are an accepted part of life and the very fact of their continued existence for decades is proof of that. The Paradise Papers, like the Panama Papers before them, are likely to make a great many rich and powerful people more than a little uncomfortable in the weeks and months ahead. Whether it will go beyond that and into the courts remains to be seen.

The Paradise Papers data release shines a light on the tax activities of politicians and some of the world’s richest people. But it appears for now that most of the questions raised are ethical rather than legal. First it was the Panama Papers, now it’s the Paradise Papers. The lid has well and truly been lifted on the exotic but ... Read More »

Donald Trump to new Fed boss: You’re hired!

US President Trump is turning the announcement of a new Federal Reserve head into a reality TV experience like his show The Apprentice. But is it just a distraction from other problems? Jens Korte reports from New York. US President Donald Trump is looking for a suitable candidate to take over the US Federal Reserve Bank, which is by many accounts the second most important position in America after the president. But the casting for the job is a throwback to his days on the reality TV show "The Apprentice" when he played himself, Donald Trump, the real estate mogul and businessman. In the show, he selected candidates from a group of applicants who were then allowed to work for him as an "apprentice." The process was long and accompanied by as much spectacle as possible. As president, Trump is now staging what the political website The Hill mockingly called "Central Bank Apprentice." For months, Trump has been tossing out names — such as Gary Cohn, formerly the number two at the investment bank Goldman Sachs, and who was seen as a favorite for the position for several months — only to drop them unceremoniously. Trump then spontaneously let Republican senators have a say by a show of hands, and then made it clear that only he has to power to make this important decision — even though the Senate must confirm his nominee. In an interview, the president even asked a talk show host for his opinion on whether he should keep the current incumbent, Janet Yellen. How did we get here? Since its founding in 1913, the US central bank has never seen the process of filling the top job play out so publicly. In the past, most presidents did not even mention that there were several candidates under consideration because the matter was simply seen as too sensitive. After all, financial markets around the world look to the Fed and its interest rate decisions. In this case, Trump is only allowed to spin the staff carousel because Yellen's tenure ends in February. But since World War II, every head of the central bank that completed their first term has been confirmed for another four years. During in the election campaign, Trump attacked Yellen for keeping interest rates low. In July, he announced that he was considering several candidates for the job. At that point, it became apparent that the president would break with decades of tradition. The relationship between the president and the Federal Reserve chairman, who is responsible for setting monetary policy, has not always been smooth. Jimmy Carter named Paul Volcker as the head of the central bank in the 1970s. To counteract the strong inflation after the oil crisis, Volcker raised interest rates massively, triggering a temporary recession. The danger of inflation was averted, but Carter was not re-elected; his successor, Ronald Reagan, gave Volcker another four years. Then came Alan Greenspan, who served under four presidents. Read more: Ex-Fed chief Bernanke 'appalled' at decision to replace Hamilton on $10 bill When Greenspan resigned in 2006, Ben Bernanke was appointed Fed chief by George W. Bush. Barack Obama gave Bernanke another four years after his election, before Bernanke's deputy Janet Yellen took up the scepter in February 2014. In all these transfers of power, the procedure has never been a public beauty contest. Repeat success The fact that the president is making the Fed casting a spectacle is not least due to the fact that he has to show that his administration has achieved some of its goals. The reform or repeal of Obamacare has failed for the time being. Of the promised $1 trillion (€859 billion) in infrastructure projects, not one major imitative has been started. Meanwhile, a reform of the tax code is still being negotiated in Congress. Read more: Decaying infrastructure taking a toll on America The nomination of the Federal Reserve chairman this week could finally be a triumph for the president. However, keeping interest rates at the appropriate level is notoriously difficult work, and the head of the Fed has to guide these decisions. Trump's claim that this is one of his most important decisions is not an exaggeration. After the collapse of Lehman Brothers in 2008, the world's financial markets were hit by the biggest crisis since the 1930s and the Federal Reserve responded with unparalleled measures. Several trillion dollars were mustered to stabilize the markets and the key interest rate was radically reduced to zero. The Fed bought bonds for over $4 trillion to shore up banks and credit markets. Now, almost 10 years later, the central bank is trying to get monetary policy back on a more normal track. But even this comes with risk. Financial markets have become accustomed to the flood of cheap money created in the aftermath of the financial crisis, and panic has spread through the stock and bond markets whenever the Fed announced that interest rates will be raised and bonds sold off. Season finale But there is a silver lining to Trump's "find the next Fed head" show: ordinary citizens now understand the significance of the position. Ironically, it is his former campaign manager Paul Manafort's involvement with Russia that is getting in the way. Since Monday hardly anyone is talking about the central bank. The headlines are full of money laundering allegations and the possible links between the White House and Russia. In the end, it is unlikely that Trump is using the nomination as a diversionary tactic. Rather, the Manafort indictment has simply messed up the "season finale" schedule. Trump is nevertheless expected to finally name his new Fed chief on Thursday before leaving for a trip to Asia. Insiders assume that Jerome Powell will take over. Powell, a Republican appointed as one of the governors of the bank by Obama in 2012, is considered a policymaker who will continue Yellen's course. The choice of Powell signals continuity to the financial markets — and the president can finally say his famous line to Yellen: "You're fired."

US President Trump is turning the announcement of a new Federal Reserve head into a reality TV experience like his show The Apprentice. But is it just a distraction from other problems? Jens Korte reports from New York. US President Donald Trump is looking for a suitable candidate to take over the US Federal Reserve Bank, which is by many ... Read More »

EU regulators raid auto giant BMW in German cartel case

The bloc's anti-trust officials have searched the offices of the premium carmaker this week in a probe investigating BMW and four other German automobile firms for suspected anti-competitive practices. BMW confirmed on Friday that EU anti-trust regulators had searched its offices in Munich this week, after the European Commission had earlier in the day refused to name the company involved. The EU, in its statement, said that the inspection related to the Commission concerns that several German car manufacturers may have violated EU antitrust rules that prohibit cartels and restrictive business practices. "Inspections are a preliminary step in investigations of suspected anti-competitive practices. The fact that the Commission carries out inspections does not mean that the inspected companies are guilty of anti-competitive behavior, nor does it prejudge the outcome of the investigation itself," the Commission added. A group of leading German carmakers including Volkswagen, Porsche, Audi, BMW and Daimler stand accused of holding illicit meetings since the 1990s to coordinate vehicle technology, cost, suppliers, markets and strategy. Daimler comes clean In July, German media reported that the cartel's secret working groups hashed out and decided the most important details of the auto business, including the inadequate size of the AdBlue tanks that could not adequately feed their diesel cars' exhaust treatment. One of the aims of the cartel was to avoid "an arms race" of AdBlue tank sizes. Meanwhile, the cartel case has turned into a race for who rats out whom first. Luxury carmaker Daimler on Friday confirmed it had applied for the status of principal witness in the EU probe. Daimler chief financial officer (CFO) Bodo Uebber told journalists that the application "principally concerns coordination in breach of anti-trust legislation which was discussed in the press a while ago." As it was yet unclear whether the EU opened an official investigation into the carmaker, Daimler saw "no need presently to make financial provisions for any possible fines," Uebber added. Rat-out-race According to German media reports, Volkswagen had also attempted to apply for the principal witness status. But Daimler was first in coming clean with Germany's and Europe's cartel watchdogs, and it could avoid a multi-billion euro fine. Volkswagen's voluntary declaration is dated July 4, 2016, but Daimler's came significantly earlier. Still, Volkswagen could get a rebate on the punishment. BMW, one of the least suspicious in diesel emissions fixing, is kept holding the bag. BMW has said from the outset that there is nothing unusual in working with other carmakers on certain components if they "do not contribute to differentiation of the two brands and are therefore not relevant to competition." According to EU law, the first co-operating co-conspirator in an anti-trust matter could walk away unpunished. The second one to break the silence would get a maximum 50 percent rebate, but only if "evidence with considerable value-add" will be delivered.

The bloc’s anti-trust officials have searched the offices of the premium carmaker this week in a probe investigating BMW and four other German automobile firms for suspected anti-competitive practices. BMW confirmed on Friday that EU anti-trust regulators had searched its offices in Munich this week, after the European Commission had earlier in the day refused to name the company involved. ... Read More »

Air Berlin files for bankruptcy protection

Crisis-stricken German airline Air Berlin is seeking protection from its creditors after running out of cash to stay solvent. But the airline says it wants to remain in operation following a government bailout. In a stock market filing Tuesday, Germany's second largest airline said it had filed for bankruptcy protection after its main shareholder, Gulf carrier Etihad, had withdrawn funding for Air Berlin. Under these circumstances, Air Berlin had come to the conclusion that there was no "positive prognosis for continuing the airline," the filing said. It added that two members of the board of directors, who joined after being nominated by Etihad, had resigned. Etihad said in a statement Tuesday Air Berlin's filing for insolvency was "disappointing" for both sides. It noted that it had granted ample financial aid to the carrier over the past six years, with Air Berlin receiving another 250 million euros ($293 million) in April to keep afloat. However, the airline requested the right to carry out insolvency proceedings under its own management, which would "facilitate negotiations with Lufthansa and other interested parties about a possible sale of Air Berlin operations," the airline said. According to German government sources, Berlin will support the plan with a bridge loan of 150 million euros, ensuring that Air Berlin flights will continue according to schedule. "We're in a time when many tens of thousands of travelers and vacationers are in multiple international holiday spots," the German Economics Ministry and Transportation Ministry said in a joint statement. "Otherwise the return flights of these travelers back to Germany with Air Berlin would not have been possible." The government funding also makes sure that Air Berlin aircraft currently under lease from rivals Eurowings and Austrian Airlines can stay in operation. Losses forever? Still in June, the German airline insisted it had sufficient cash to stay solvent despite suffering heavy losses and a string of flight cancellations. "Insolvency is not an issue for us. We have sufficient liquidity and a reliable partner, Etihad, which has pledged its support through to October 2018," a spokeswoman said at the time. Air Berlin booked losses amounting to 1.2 billion euros for the last two years, and has depended on cash infusions from key shareholder Etihad for many years. Except for two quarters, Air Berlin has never turned a profit since 2008. In a bid to turn to the tide, the budget carrier embarked on a massive restructuring plan in September 2016 that included renting 38 aircraft with crew to Lufthansa and slashing 1,200 jobs - about one in seven of its workforce. Amid the restructuring, it was hit by a series of flight cancellations and severe delays, leading to a flood of complaints. This has led to a massive drop in customers. Between January and July, a total of 13.79 million passengers flew the airline, marking a decrease of 16 per cent compared with the same period in 2016. In July alone, the total number of passengers served by Air Berlin fell by 24 percent compared with the same month last year. Now, Germany's flagship carrier, Lufthansa, appears to become Air Berlin's savior. Germany's biggest airline said Tuesday that it was "already in negotiations with Air Berlin to take over parts of the Airberlin Group and is exploring the possibility of hiring additional staff."

Crisis-stricken German airline Air Berlin is seeking protection from its creditors after running out of cash to stay solvent. But the airline says it wants to remain in operation following a government bailout. In a stock market filing Tuesday, Germany’s second largest airline said it had filed for bankruptcy protection after its main shareholder, Gulf carrier Etihad, had withdrawn funding ... Read More »

VW manager pleads guilty in US ‘dieselgate’ case

A Volkswagen (VW) manager, currently jailed in connection with the German automaker's emissions scandal in the United States, has pleaded guilty in a Detroit courtroom, hoping for lesser punishment. US prosecutors confirmed Friday that charges against Volkswagen executive Oliver Schmidt would be reduced after he pleaded guilty to his part in covering up the German carmaker's "dieselgate" emissions-cheating scandal in the US. Schmidt, who led the German automaker's US regulatory compliance office until 2015, appeared in a Detroit court to enter his plea. He had pleaded not guilty before his change of mind. US prosecutors said they would drop a wire fraud charge, which carried a maximum penalty of 20 years in prison. But they retained a fraud conspiracy charge and a charge of violating the US Clean Air Act, which together carry a maximum sentence of seven years. Also under the plea agreement, Schmidt may have to pay a fine of between $40,000 (34,000 euros) and $500,000. The final verdict is due December 6, 2017. In 2015, VW admitted it had equipped about 11 million cars worldwide with defeat devices to evade emissions tests, including about 600,000 vehicles in the United States. Diesel cars marketed as clean were in fact emitting 40 times the permissible limits of nitrogen oxide during normal driving. Altogether eight managers from the German car group are facing charges by US authorities for the company's breach of emissions regulations. Many of the other managers charged are believed to be in Germany, making extradition to the US unlikely. Schmidt was the second VW employee to plead guilty, after former company engineer James Liang admitted last year to helping devise the defeat devices. An FBI affidavit cited him as a cooperating witness. In March, VW agreed to pay $4.3 billion in penalties after pleading guilty to conspiring to violate the US Clean Air Act. That was on top of $17.5 billion in civil settlements. The carmaker still faces an array of legal challenges in Germany and worldwide, and has so far set aside more than 22 billion euros to cover dieselgate costs.

A Volkswagen (VW) manager, currently jailed in connection with the German automaker’s emissions scandal in the United States, has pleaded guilty in a Detroit courtroom, hoping for lesser punishment. US prosecutors confirmed Friday that charges against Volkswagen executive Oliver Schmidt would be reduced after he pleaded guilty to his part in covering up the German carmaker’s “dieselgate” emissions-cheating scandal in ... Read More »

Lufthansa profit flies high on lower costs

The German flagship carrier has beaten analysts' expectations for 2016 results, reporting a record net profit despite falling revenues, which shows that the airline's drive to save costs is bearing fruit. Europe's biggest airline group by revenues unveiled a net profit of 1.78 billion euros ($1.9 billion) for last year - a 4.6 percent increase on 2015, and coming despite a 1.3 percent decline in sales to 31.7 billion euros. "In a very demanding market environment, we successfully kept the Lufthansa Group's margins at their record prior-year levels, through consistent capacity and steering measures and, above all, through our effective cost reductions," chief executive Carsten Spohr said in a statement. Lufthansa group, which includes Austrian Airlines, Swiss, Brussels Airlines and Eurowings as well as the core German flag-carrier, recorded the improved results despite overcapacity in airline services in Europe. This is driving fares, with Lufthansa's revenue per available seat kilometre having declined to 7.8 euro cents, from 8.3 euro cents in 2015. Nevertheless, passenger airlines remained Lufthansa's biggest earner, with improvements in operating profit for its flagship airline and Austrian Airlines. But low-cost passenger carrier Eurowings suffered an operating loss for the year, as did freight unit Lufthansa Cargo. Looking ahead, the group warned that underlying profit for 2017 - a measure that excludes the effect of some changes in pension accounting - would be "slightly below" the 1.75 billion euros logged in 2016. The group plans to offer shareholders a dividend of 50 euro cents per share, the same level as last year's payout. Lufthansa published its 2016 result one day after it had announced a settlement with its pilots over a long-running pay dispute that cost the group 100 million euros in 2016.

The German flagship carrier has beaten analysts’ expectations for 2016 results, reporting a record net profit despite falling revenues, which shows that the airline’s drive to save costs is bearing fruit. Europe’s biggest airline group by revenues unveiled a net profit of 1.78 billion euros ($1.9 billion) for last year – a 4.6 percent increase on 2015, and coming despite ... Read More »

Adidas profits hit the billion mark

German sports goods maker Adidas has announced record profits for 2016, beating analysts' expectations. The Bavaria-based company said net profit topped a billion euros for the first time in the firm's history. The firm said Wednesday that annual net profit increased by 60.5 percent, to 1.02 billion euros ($1.07 billion). The announcement was a surprise to analysts, beating their predictions and the company's own forecast. Chief Executive Kasper Rorsted hailed 2016 as an "exceptional year" for the company, with double-digit growth in almost all regions of the world. It was a big year for sports that featured the Olympic Games in Rio and the European Football Championships in France. The three stripes Much of 2016's success for Adidas was down to strong growth of 16.6 percent at its central three-striped brand, accounting for the biggest share of its revenues. Subsidiary Reebok grew much more modestly at 1.1 percent. Overall revenues increased 14 percent to top 19 billion euros. The company also unveiled an optimistic forecast for this year. They predicted revenue growth of between 11 and 13 percent, adjusting for currency effects, and aim to increase profits by 18-20 percent to around 1.2 billion euros. Citing its strong results, Adidas said it would offer shareholders a dividend of 2 euros per share for 2016, up from 1.60 euros the previous year. After the news was announced, shares in the company leapt on the Frankfurt Stock Exchange. In early morning trading, the stock gained 8.2 percent, which added $2 billion to its market value. By mid-day it was still up over 7 percent, trading at around 171 euros per share.

German sports goods maker Adidas has announced record profits for 2016, beating analysts’ expectations. The Bavaria-based company said net profit topped a billion euros for the first time in the firm’s history. The firm said Wednesday that annual net profit increased by 60.5 percent, to 1.02 billion euros ($1.07 billion). The announcement was a surprise to analysts, beating their predictions ... Read More »

UK growth forecasts cut due to Brexit

Britain has cut its official forecasts for economic expansion in the next two years. Finance Minister Philip Hammond delivered the first budget statement since voters decided to leave the European Union. Addressing Parliament on Wednesday, British Finance Minister Philip Hammond said gross domestic product in the UK was expected to grow by 1.4 percent in 2017, down from an estimate of 2.2 percent made in March, before voters decided to leave the EU. Hammond also reported that the Office for Budget Responsibility - Britain's independent forecaster - now saw growth in 2018 come in at 1.8 percent, compared with March's prediction of 2.1 percent. Britain's economy has so far largely withstood the shock of the Brexit vote, wrong-footing the Bank of England and the bulk of economists who expected a bigger immediate hit beyond the depreciation of the pound. Fresh borrowing But weak public finances will leave Hammond little room to ramp up public spending or go for big tax cuts in the next couple of years. "Our task is to prepare our economy to be resilient as we exit the EU and match-fit for the transition that will follow," Hammond told parliament. He added that the government would maintain its commitment to fiscal discipline, while recognizing the need for investment to drive productivity. Hammond acknowledged, though, that he would need to borrow billions more pounds over the next five years, with net public sector debt forecast to rise to a peak of 90.2 percent of GDP in 2017/18, up from a projected 81.3 percent in March 2016.

Britain has cut its official forecasts for economic expansion in the next two years. Finance Minister Philip Hammond delivered the first budget statement since voters decided to leave the European Union. Addressing Parliament on Wednesday, British Finance Minister Philip Hammond said gross domestic product in the UK was expected to grow by 1.4 percent in 2017, down from an estimate ... Read More »

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