Morning Briefing The Bundesbank Skips on the Check

The Bundesbank leaves the German treasury holding the bag, and blames Mario Draghi; SPD Chancellor Wunder Martin Schulz' ratings soar after voters gobble down his new pie-in-the-sky recipe; VW-Group execs Rupert Stadler and Herbert Diess face the music in Wolfsburg.


The Bundesbank is pumping significantly less money into the German treasury this year than planned: €400 million instead of €2.5 billion sought by Finance Minister Wolfgang Schäuble. The reasons are big reserves needed to cover the risks of purchasing government debt, and the low interest rate policies of the ECB, which are crimping the Bundesbank’s ability to turn a profit. “Our balance sheet is an x-ray of current monetary policy health,’’ said Bundesbank President Jens Weidmann, a critic of low ECB rate policies. When one looks closely at this x-ray, the signs of advanced monetary osteoporosis and heightened fracture risk are unmistakable. Chief surgeon Mario Draghi has every reason to change his treatment regimen.


The Social Democrats are jubilant about the momentary popularity of their new party leader, who is promising German voters the political equivalent of a cure for cancer, money for nothing and pie in the sky. Our weekend cover story, “The Return of Robin Hood,’’ analyzes the seven core promises of chancellor candidate Martin Schulz: What they cost, what they would bring, who they would hurt and who they would help. In case Chancellor Angela Merkel plans to find her public voice again, she may see a few good arguments here to restart her dormant campaign.


Our analysis makes clear that Schulz is an old-school tax-and-spender who views German business as a cow that needs to be milked firmly on the udders. Former SPD Chancellor Helmut Schmidt, who fought this reflexive thinking in his party, must be doing cartwheels in his grave. His former Super Minister for Economics and Finance, Karl Schiller, comes to mind. He urged fellow Social Democrat comrades to “keep all the cups in the cupboard.’’ Translation: Get real.


Audi CEO Rupert Stadler, who apparently knew about Volkswagen’s Dieselgate manipulations more than three years before he said he did, was thrown a lifeline today from his boss, VW CEO Matthias Müller. In a statement, Audi’s supervisory board, which Müller chairs, said it still had full “confidence’’ in Stadler even after an ex-employee pointed the finger at him in German court this week. The endorsement wasn’t entirely unexpected.  If a single link in the VW command chain breaks, all of Wolfsburg could come tumbling down.


But Stadler’s reprieve may not be repeated with another VW top manager, board member Herbert Diess. The VW-brand manager has been locking horns with his labor colleagues, trying to wring the financial concessions VW needs to absorb the blows of Dieselgate. Union reps have complained that Diess is playing too rough. Diess says he’s just doing his job. His future could be determined at today’s meeting of Volkswagen’s supervisory board. Our reporters say the situation for Diess is dire and there may be discussion of cutting him loose. But eliminating the squeaky wheel won’t solve Volkswagen’s roadside breakdown. The automaker still needs a thorough overhaul.


Donald Trump is certain to generate a wave of new headlines today. His fans are hotly anticipating – and his opponents dreading – his appearance in Washington at the annual CPAC conference, a lovefest put on by America’s most influential conservative political action committee.  This conference is part show, part polemic-a-thon and part political happening all wrapped into one. But beware: All moderate opinions must be checked at the door.


Once again, cold, rainy weather is trying to put a damper on the Carnival revelry in Germany’s party-obsessed northwest. A storm front yesterday forced the collective craziness into bars and restaurants up and down the Rhine River in Cologne, Düsseldorf, Bonn and Mainz. But that didn’t stop Düsseldorf’s mayor, Thomas Geisel and his wife Vera, E.U. commissioner Günther Öttinger (dressed as a Mexican) and hundreds of employees of Handelsblatt Publishing. Three examples: Our spokeswoman, Kerstin Jaumann, dressed as a Red Dragon; my executive assistant, Larissa Schepers was Cinderella in pink; and Rebecca Nickish, who leads the Morning Briefing team, was a pirate. As for me, this native of Berlin – which is about as far from Carnival as Vladivostok– I gave it a pass. But a steady stream of photos from the front kept me in the picture.


Here’s wishing you a restful weekend. Yours sincerely, Gabor Steingart


Image of the Day

Dancers from the Vienna State Ballet perform at the opening ceremony of the annual Vienna Opera Ball in Austria.