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VW CEO under pressure as stock crashes

Shares in German carmaker Volkswagen have nosedived after it admitted to rigging US emissions tests. VW has halted all sales of diesel vehicles there and calls are mounting for CEO Winterkorn to resign. Shares in German auto giant Volkswagen (VW) fell more than 20 percent in morning trading at the Frankfurt stock exchange on Monday in reaction to revelations that some of its diesel cars in the United States had been fitted with software that gave false emissions data. In a statement on Sunday, the carmaker had said that the US Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) had "detected manipulations that violate American environmental standards" while testing VW diesel cars. Chief executive Martin Winterkorn issued an apology and said he had ordered an external investigation into the matter. "The board of management takes these findings very seriously. I personally am deeply sorry that we have broken the trust of our customers and the public," Winterkorn said. Sales stop Meanwhile, the Volkswagen Group has ordered its dealers in the United States to halt all sales of the latest diesel models of its Volkswagen and Audi brands. The EPA said on Friday the software in these models deceived regulators measuring toxic emissions. Cynthia Giles, an enforcement officer at the EPA, said the cars in question "contained software that turns off emissions controls when driving normally and turns them on when the car is undergoing an emissions test". On the road, the cars were emitting as much as 40 times the level of pollutants allowed under clean air rules, Giles added. Volkswagen could face civil penalties of $37,500 (33,100 euros) for each vehicle not in compliance with federal clean air rules. Some 482,000 four-cylinder VW and Audi diesel cars sold since 2008 are involved in the allegations. If each car involved is found to be in noncompliance, the penalty could amount to $18 billion, an EPA official confirmed during a telephone conference on Friday. VW CEO Martin Winterkorn said the German carmaker would fully cooperate with US regulators, and added that the company would "not tolerate violations of any kind of our internal rules of law." Calls for the CEO to resign According to Ferdinand Dudenhöffer, automobile expert with Germany's Duisburg-Essen University, the chief executive is part of VW's problem and not the solution. He assumes Winterkorn must have known about the manipulations. "This component has received official clearance for all markets from the VW Development Department. The head of this department is Martin Winterkorn," Dudenhöffer told DW. "VW's board of directors needs to go on the offensive during a meeting scheduled for Friday to stem the fallout of the scandal. But this can only be achieved without CEO Winterkorn, I believe," he added. Bärbel Höhn, the head of the German parliament's environment commission, also said she thinks the deceptive software device couldn't have been installed without the CEO's approval. Höhn, a member of the environmentalist Greens Party, added she wouldn't be surprised if other carmakers are also found to have resorted to manipulations to meet tightened emissions standards in the United States and Europe.

Shares in German carmaker Volkswagen have nosedived after it admitted to rigging US emissions tests. VW has halted all sales of diesel vehicles there and calls are mounting for CEO Winterkorn to resign. Shares in German auto giant Volkswagen (VW) fell more than 20 percent in morning trading at the Frankfurt stock exchange on Monday in reaction to revelations that ... Read More »

US accuses Volkswagen of evading clean air standards

US regulators have called German carmaker Volkswagen out for intentionally violating clean air standards. If the allegations are true, the Wolfsburg-based company could face billions of dollars in fines. The US Environmental Protection Agency (EPA) on Friday accused Volkswagen of deliberately circumventing clean air rules on nearly 500,000 diesel cars, by using software that evades the agency's emissions standards. The feature, known as a "defeat device," detects when the car's emissions are being tested and turns on full emissions control systems only then. During normal driving situations, the controls are turned off, the EPA said. This could result in cars releasing as much as 40 times more emissions allowed under clean air rules meant to ensure public health is protected," Cynthia Giles, an EPA enforcement officer, told reporters in a teleconference. Public threat "Using a defeat device in cars to evade clean air standards is illegal and a threat to public health," she said. Prior to issuing the violation notice, the EPA said it worked with the California Air Resources Board and would continue to investigate "these very serious matters." If the allegations turn out to be true, Volkswagen could face penalties of up to $18 billion (15.8 billion euros). The German automaker said it is cooperating in the investigation. The recall affects about 482,000 diesel passenger cars sold in the US since 2009.

US regulators have called German carmaker Volkswagen out for intentionally violating clean air standards. If the allegations are true, the Wolfsburg-based company could face billions of dollars in fines. The US Environmental Protection Agency (EPA) on Friday accused Volkswagen of deliberately circumventing clean air rules on nearly 500,000 diesel cars, by using software that evades the agency’s emissions standards. The ... Read More »

Merkel wants car industry’s support for refugees

Opening the IAA Motor Show in Frankfurt, German Chancellor Angela Merkel has urged the domestic auto industry to offer vocational training and jobs for refugees. She said their integration required everyone's support. German Chancellor Angela Merkel used her Thursday visit to the IAA Motor Show in Frankfurt to urge domestic carmakers to intensify their efforts to help as many refugees as possible. "We are an attractive country," Merkel said. "Many refugees expect us to help them with the integration process." The Chancellor called on carmakers to provide internships, vocational training and jobs for refugees while thanking companies for the endeavors already undertaken in this direction. Merkel said she was confident the integration of refugees would be successful in a nation boasting a robust labor market and high employment. Risky technologies? In her address to auto makers attending this year's IAA, Merkel also praised the companies' efforts towards autonomous driving, but warned that secure data transmission and data protection were vital issues for consumers. She told the German VDA auto industry association that she was determined to continue her commitment to free trade agreements with Canada, the US and Japan. Merkel also touched on the sensitive issue of e-mobility, aware of the fact that the German government's plan to get 1 million e-cars onto German roads by 2020 might not come off in view of lackluster consumer demand. She told carmakers in the country that Berlin would reach a decision still this year on what additional incentives the government was willing to provide to boost production and demand for electric cars.

Opening the IAA Motor Show in Frankfurt, German Chancellor Angela Merkel has urged the domestic auto industry to offer vocational training and jobs for refugees. She said their integration required everyone’s support. German Chancellor Angela Merkel used her Thursday visit to the IAA Motor Show in Frankfurt to urge domestic carmakers to intensify their efforts to help as many refugees ... Read More »

World’s biggest brewers to merge?

Beer and soft drink maker Anheuser-Busch InBev wants to take over rival SABMiller from the UK. Should the deal come about, the two companies would control no less than a third of the global beer market. Anheuser-Busch InBev, the world's biggest beer maker, approached rival SABMiller about a takeover, the two companies confirmed Wednesday. A merged group would have a combined market value of around $270 billion (240 billion euros), based on current prices. It would combine AB InBev's dominance of Latin America with SABMiller's strong presence in Africa, both fast-growing markets, as well as strengthen their position in Asia. Britain-based SABMiller, the world's No. 2 brewer, said on Wednesday that it had been informed by its bigger Belgian rival that it intended to make a takeover bid, but it did not have any further information about the terms. "The board of SABMiller will review and respond as appropriate to any proposal which might be made," it said. "There can be no certainty that an offer will be made or as to the terms on which any offer might be made." AB InBev responded by confirming its approach to SABMiller's board. "AB InBev's intention is to work with SABMiller's board toward a recommended transaction." Shares in SAB, which owns such brands as Peroni, Grolsch and Pilsner Urquell, were up more than 20 percent. Anheuser-Busch InBev, which has Budweiser, Stella Artois and Corona, saw its shares jump 7 percent before trading was suspended. Big Brewers slicing up the global market There has been speculation of such a mega-merger for years, with the global beer market being increasingly dominated by big multinationals. One key area of concern to regulators would be the combined group's market share in the United States, where AB InBev controls almost half the market and SABMiller's joint venture with Molson Coors just under 30 percent.

Beer and soft drink maker Anheuser-Busch InBev wants to take over rival SABMiller from the UK. Should the deal come about, the two companies would control no less than a third of the global beer market. Anheuser-Busch InBev, the world’s biggest beer maker, approached rival SABMiller about a takeover, the two companies confirmed Wednesday. A merged group would have a ... Read More »

‘Immigration an opportunity for Germany’

Bundesbank chief Jens Weidmann has called the current influx of refugees an opportunity for the German economy. He warned, though, that the integration process would not be easy in the years ahead. The head of the German central bank, Jens Weidmann, said Wednesday the current influx of refugees presented a huge challenge for Germany, but also an opportunity in the face of the country's ageing population. "Coping with the influx of refugees will demand a lot from Germany," Weidmann told the "Süddeutsche Zeitung" daily in an interview. "But it also brings with it opportunities." The Bundesbank chief made it clear that those opportunities hinged on a successful integration of the newcomers into society and the domestic labor market. Stepping into the breach Weidmann emphasized that given the demographic change in Europe's powerhouse with a rapidly ageing society as a result Germany needed additional workers in order to maintain its prosperity. Estimates put the number of qualified workers that Germany will lack by 2020 at 1.8 million. Weidmann warned that although the German economy was currently in a good shape, it would not be in such a comfortable situation forever, adding there was no reason "to rest on our laurels." "The current recovery will come to an end at some point; in the longer term, Germany faces substantial challenges such as increased competition form emerging economies and the continued switch from fossil fuels to renewable energy." Weidmann said migrants could play a crucial role in helping to meet those targets.

Bundesbank chief Jens Weidmann has called the current influx of refugees an opportunity for the German economy. He warned, though, that the integration process would not be easy in the years ahead. The head of the German central bank, Jens Weidmann, said Wednesday the current influx of refugees presented a huge challenge for Germany, but also an opportunity in the ... Read More »

IMF changing tack on Greece

Latin Americans and Asians are happy that they do not need the help of the International Monetary Fund (IMF). But, Europe can no longer function without it. What's behind the IMF's interest in Greece? With loans totaling approximately $25 billion, Greece is currently the International Monetary Fund's (IMF) most important customer. "The IMF has crossed the 'point of no return'," says Rolf J. Langhammer from the Kiel Institute for the World Economy in northern Germany. "Basically, it should have walked away at an earlier point in time. Now, it's too late." The economist from Kiel, who has advised international organizations like the World Bank, the EU and German ministries, understands well why many of the 188 members of the IMF are not enthusiastic about the fund's extraordinary attentiveness to Athens. Many developing countries feel that Greece is a rich European industrial country. "Many developing countries think, 'you have always been tough with us but you are always making exceptions for the rich Europeans,'" says Langhammer. They wonder why they should have to pay for a country in the euro zone. The professor feels there is a "great deal of logic" behind the question. Change of direction in Washington? It seems paradoxical: The term debt relief is a taboo in Latin America, Asia and Africa but that is exactly what Greece asked the IMF for. On August 14, the head of the IMF, Christine Lagarde, made the organization's position clear by saying, "It is crucial for Greece's debt sustainability that its European partners commit themselves to significant debt relief, which goes far beyond the measures taken so far." The IMF's concerns about the sustainability of Greek debt, however, actually reflect self-interest. "We know that from the Latin American debt crisis in the 1980s," recalls the economist Langhammer. "Then they argued that a haircut would increase the chances serving the interest payable on the remaining debt." Does the fund simply defend the interests of its members by investing their money well? "The IMF is shouting as loud as it can so that no one gets the idea that it could possibly take part in a haircut," says Jürgen Kaiser, the coordinator of Jubilee Germany, a German NGO that promotes fair and transparent bankruptcy rules. Christine Lagarde lacks explanations "Situations may arise in which other lenders may ask, 'why are you not around when it comes to debt relief?'" he explains. In the end, there are no rules that say that IMF is given priority ahead of other creditors. Debt expert Kaiser finds the matter of distributing the debt burden after a haircut "quite intriguing." If Greece were granted debt relief and the IMF were asked if it would partake in it, then Lagarde would have problems explaining, says Kaiser. The IMF had problems explaining what happened in 2002 as well. At that time, more and more emerging and developing nations distanced themselves from the organization. Sustained growth rates allowed them to form foreign exchange reserves and enabled them to pay off their debts. The IMF lost its customers and was forced to look around for new business opportunities. New fields of opportunities inadvertently opened up in 2009 during the world economic crisis. At that time, IMF chief Dominique Strauss-Kahn took a chance. "The IMF gained influence during the world economic crisis," recounts Kaiser. The IMF now has access to approximately 300 billion dollars. "Even if crises erupt elsewhere, the IMF's involvement in Greece would not prevent the IMF from awarding emergency loans elsewhere," he says. "There is no competition for funds." What are sustainable debts? Kaiser thinks a haircut for Greece is still possible, even though the IMF will be involved in the third bailout package. "They have bought themselves a little bit of time. Until the next deadline," he reckons. The programs that Athens must now implement are based on the same "illusory figures that have been forced on the country the past five years." The IMF and the ESM, the European Stability Mechanism, came closer when the controversy over the definition of debt sustainability broke out this week. Now, the debt amount itself is not decisive, but the servicing of debt, instead. Europe's lenders claim to have given Athens the best conditions possible to service its debt to the IMF, argues the ESM. Langhammer considers the changed approach long overdue. "The sky may fall in on Greece, but Greece will continue to exist as a state. A country is an infinite investment object," he says and adds, "Economically, it is complete nonsense to think that a country will pay back its debts. It is more important that a country is able to meet its interest payment obligations on a regular basis."

Latin Americans and Asians are happy that they do not need the help of the International Monetary Fund (IMF). But, Europe can no longer function without it. What’s behind the IMF’s interest in Greece? With loans totaling approximately $25 billion, Greece is currently the International Monetary Fund’s (IMF) most important customer. “The IMF has crossed the ‘point of no return’,” ... Read More »

US stocks up sharply after opening bell

The Dow jumped several hundred points as trading started in the US. A six-day losing streak may finally come to an end. European markets were undecided, wondering what effect China's interest-rate cut may have. US stocks opened sharply higher on Wednesday, following losses on six consecutive trading days. The Dow was up 2.2 percent within minutes but pared some of its gains later, not being able to defend the 400 points it added as trading started. Markets in London, Paris and Frankfurt were all down by more than 1 percent upon opening on Wednesday, but recovered fully in the afternoon, touching positive territory before sliding again. Germany's DAX ended the day down 1.29 percent and once again dropped below the 10,000-point-mark. The weak start was largely expected after volatile trading in Shanghai saw the market there fluctuate wildly between gains as high as 4.29 percent and losses as low as 3.85 percent. Shanghai stocks eventually closed down 1.27 percent, a much less worse performance than the last three days of trading, in which investors saw roughly 20 percent of stock value wiped out. Japan's Nikkei fared more favorably, rising 3.2 percent as investors went on a bargain hunt following six days of falling shares. Outside Japan, MSCI's broadest index of Asia-Pacific shares also crept up 0.2 percent. In Europe, the markets cast off gains they had made a day before when China's central bank cut interest rates and lowered the cash-on-hand requirements for banks in an attempt to lift slumping shares. Market lag In initial trade, London's benchmark FTSE 100 index lost 1.3 percent, Frankfurt's DAX 30 tumbled 1.69 percent and the CAC 40 in Paris dropped 1.44 percent. The lag in the German DAX left it 20 percent below a record high reached in April. Some of the biggest losses in Germany were felt by the software maker SAP and the luxury automaker BMW. Commodities also fell sharply, with the price of copper dropping at the prospect of slowing demand from China, the world's leading consumer of metals. Bank stocks also fell due to their exposure to the massive sell-off among Chinese investors. But some analysts are still confident that a number of stocks could recover in a few months time. Strategists at Morgan Stanley, for instance, identified for clients 20 shares they considered to be "oversold." BMW was one of them.

The Dow jumped several hundred points as trading started in the US. A six-day losing streak may finally come to an end. European markets were undecided, wondering what effect China’s interest-rate cut may have. US stocks opened sharply higher on Wednesday, following losses on six consecutive trading days. The Dow was up 2.2 percent within minutes but pared some of ... Read More »

China slashes interest rates to back economy

China's central bank has once again cut interest rates and lowered the amount of cash banks must have on hand, to ease pressure on lenders amid fears that the world's second-largest economy could be slowing. The People's Bank of China (PBoC) cut its benchmark lending and deposit rates by 0.25 percentage points on Tuesday, the bank said on its website. It also relaxed its so-called reserve requirement ratio (RRR) for most big banks, allowing them to have less cash on hand and instead lend it out. Such flexibility is widely regarded as a direct stimulus measure since it pours money into the real economy. The rate cuts came at a time when Beijing is battling a massive stock rout that has cost investors billions and sent shockwaves around the globe. Plunging shares On Tuesday, Chinese stock indexes plummeted more than 7 percent, reaching lows not seen since December. Share losses were similarly devastating the day before, which some analysts began referring to as "Black Monday" because shares had plunged over 8 percent. In just two days, billions of yuan have vanished. As a consequence, markets around the world went into panic mode as investors frantically tried to unload their stocks to avoid incurring huge losses. European and Pacific markets, however, were able to pare some of their losses. China is an important driver for the global economy, but not everyone believes that Beijing's declarations of steady growth and healthy forecasts for the year and beyond are accurate. According to official data, gross domestic product (GDP) in China grew by 7 percent in the second quarter, a poor performance for such a massive economy - the world's second-largest - which has been growing at breakneck speed for more than two decades. Poor performance Last year, China recorded its worst annual GDP growth in nearly a quarter century: 7.4 percent. China's "economic growth rate remains under pressure," the PBoC said in a statement announcing the rate cut, adding that they would "support the real economy to continue to develop healthily." Beijing has forecast annual growth this year of around 7 percent, a figure many economists regard as too high considering the weak economic data the country has logged since January.

China’s central bank has once again cut interest rates and lowered the amount of cash banks must have on hand, to ease pressure on lenders amid fears that the world’s second-largest economy could be slowing. The People’s Bank of China (PBoC) cut its benchmark lending and deposit rates by 0.25 percentage points on Tuesday, the bank said on its website. ... Read More »

China stocks slump as sell-off continues

دنیا کی دوسری سب سے بڑی معیشت چین کے بازار حصص میں آج منگل کو مسلسل دوسرے روز بھی شدید مندی کا رجحان پایا جاتا ہے۔ ایشیا کی دوسری سٹاک مارکیٹوں میں گزشتہ روز عالمی منڈیوں میں نظر آنے والی گراوٹ کے بعد ابھی تک اضافہ دیکھا جا رہا ہے۔ چین سٹاک مارکیٹ میں شنگھائی کمپوزٹ انڈیکس میں آج منگل کے روز مزید 3.2 فیصد کی کمی ہوئی جبکہ پیر کو یہ انڈیکس ڈرامائی طور پر ساڑھے آٹھ فیصد تک گر گیا تھا۔ گزشتہ روز یورپی اور امریکی سٹاک مارکیٹوں میں بھی شدید مندی دیکھی گئی۔ ماہرین عالمی سطح پر ان نقصانات کی وجہ چینی معیشت میں ترقی کی سست روی بتا رہے ہیں اور خدشہ ہے کہ یہ صورت حال عالمی منڈیوں کو مزید متاثر کرے گی۔

Shanghai stocks tumbled on Tuesday, extending their steepest four-day rout in almost 20 years, after worries about China’s faltering economy sparked panic selling across global share markets on Monday. Shanghai stocks fell more than six percent at Tuesday’s open, extending Monday’s losses in which China’s main benchmark had its biggest plunge in eight years. The Shanghai Composite Index fell as ... Read More »

Shares in China plunge 8 percent as state support measures fail to revive confidence

After falls in markets last week, the new week has started with further major declines in Asia, wiping out gains for the year. Emerging-market falls are also having an influence, analysts say. The Shanghai Composite Index sank 8.4 percent to 3,213.76 at 10:14 a.m. local time (0214 UTC) on Monday. The fall wiped out the Index's gain for the year. It also dropped below the key 3,500 level that has previously spurred state buying. Analyst at consultancy CEBM, Qi Yifeng, commented on Monday: "The market is in a downtrend. There's no good news, stocks are still expensive, and there's no fresh money coming in." Although Chinese authorities said over the weekend they would allow pension funds to buy shares for the first time, there was no cut in reserve ratios which some analysts had anticipated. Qi added: "With no RRR (reserve requirement) cut over the weekend, the market will directly head south." The RRR is the fraction of a bank's total deposits that it must hold in reserve, either in its own vault or deposited at a central bank - lowering its level can inject further capital into the markets. Nor did Qi think the decision on pension funds would turn market fortunes: "The pension fund news will not help, because the money is limited, you don't know when the money will come in, and the purchase is not sustainable." Mizuho Bank analysts suggested the market correction was also due to declines in emerging markets: "While some blame the correction on the ongoing Chinese slowdown given the poor Chinese flash PMI read," the Bank wrote in a daily market commentary. "We think it also reflects contagion and position adjustment given the significant declines seen in emerging markets." Shanghai's index had dropped 12 percent last week after data indicated the economic slowdown was deepening. Official measures intended to arrest the market decline include a $400 billion (348 billion euro) fund for a state agency to buy stocks, a ban on selling by major shareholders and an order to state-owned companies to buy stocks. In other Asian markets on Monday, Hong Kong's Hang Seng China Enterprises lost 5.1 percent to reach its lowest level since May. Taiwan's benchmark index recorded its biggest fall since 1990 as it lost 7.4 percent in early trade. Tokyo's Nikkei dropped more than 3 percent.

After falls in markets last week, the new week has started with further major declines in Asia, wiping out gains for the year. Emerging-market falls are also having an influence, analysts say. The Shanghai Composite Index sank 8.4 percent to 3,213.76 at 10:14 a.m. local time (0214 UTC) on Monday. The fall wiped out the Index’s gain for the year. ... Read More »

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