New, disturbing news reaches us daily now from the United States, courtesy of President Donald Trump. He has ordered religious vetting of new arrivals at airports, fired his acting attorney general and secured a seat on the National Security Council for friend and far-right blogger Steve Bannon. Trump, whose fairy-tale rise from real estate mogul to president has fascinated many, seems bent on destroying his election triumph. We’re reminded of the words of F. Scott Fitzgerald: “Show me a hero, and I’ll write you a tragedy.”
Germany appears to be America’s new enemy No. 1. In an interview with The Financial Times, Peter Navarro, head of Trump’s new National Trade Council, accused Europe’s largest economy of currency manipulation. Berlin, he said, is using a “grossly undervalued” euro to “exploit” its trade partners. The presidential advisor referred to the European currency as an “implicit deutsche mark.” With friends like these, who needs enemies?
Brussels is increasingly agitated by Washington’s jabs. European Council President Donald Tusk yesterday called U.S. policy “dangerous.” The European Union is threatening to place the United States on a black list of tax havens. This week, it will send a letter to U.S. federal and state governments asking how they deal with illegal practices such as money laundering and drug money, as we report in today’s issue. Reading this, you get the sense that explosives are being wrapped around both ends of the trans-Atlantic bridge.
At the start of 2008, utility E.ON was the DAX Index’s most valuable company, valued at €105 billion. Analysts today estimate its worth at under €14 billion. That makes it an acquisition target, according to our energy expert, Jürgen Flauger. But after E.ON transfers its responsibility for nuclear waste disposal to a government clean-up fund, its balance sheet will look a lot better. Then, only its remaining energy operations will count and “they’re humming,” Flauger writes. That makes acquisition rumors look like a compliment to CEO Johannes Teyssen, who’s retooled the group and must have done something right after all.
But one can’t really say the same about Klaus Kleinfeld, the only German leading a top-tier U.S. blue-chip. Investors are unhappy with his costly acquisitions and decision to split metals giant Alcoa into aluminum maker Alcoa and aircraft and auto parts maker Arconic. Leading the critics is hedge fund legend Paul Singer, an Arconic investor. Kleinfeld desperately needs to show better numbers – and good friends to watch his back.
Swiss drugs maker Roche had some good news and bad news today. Revenue measured in Swiss francs rose 5 percent in 2016 and earnings by 8 percent. But these are bitter numbers for politicians struggling to curb health care costs. Today’s higher earnings are tomorrow’s higher health insurance costs.
At Siemens’ annual shareholders meeting today, CEO Joe Kaeser said net profit surged by 25 percent in the three months through December to €1.9 billion. The other big news: Former SAP co-CEO Jim Hagemann Snabe will be Siemens’ new supervisory board chairman, replacing Gerhard Cromme. Even if the board is changing its leadership, Cromme, the architect of the ThyssenKrupp steel merger, remains an icon of German industry.
Professor Bert Rürup, 73, the former economic advisor to Chancellor Gerhard Schröder, has been appointed Handelsblatt’s new chief economist. In addition to his existing role as head of Handelsblatt Research Institute, he will assume a more public-facing role for our group. The renowned economist made his name as a clever collective-bargaining negotiator and a tireless pension and labor market reform advocate. In these turbulent times, it is exactly his kind of expertise that is needed most.
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