Fiat in talks about a takeover of GM's Opel unit

Special Report: Global Financial Crisis

BEIJING, May 4 -- The head of Italian car maker Fiat SpA, which is in the process of acquiring United States-based auto maker Chrysler, is continuing talks with German officials about a possible takeover of General Motors' Opel unit, according to media reports on Saturday.

Both the Sueddeutsche Zeitung newspaper and Focus magazine reported, citing unidentified sources, that Fiat CEO Sergio Marchionne expects to meet today with German Economy Minister Karl-Theodor zu Guttenberg and Foreign Minister Frank-Walter Steinmeier to present a concept for taking over Opel.

Both ministries would only confirm that the meetings were planned.

GM has been trying to find investors for its non-core and non-profitable assets as part of a restructuring in which it has sought billions of dollars in aid from the American government to avert its collapse.

Opel has said it needs 3.3 billion euros (US$4.3 billion) to get through the economic crisis, while the German government has said it doesn't foresee giving direct state aid.

German Chancellor Angela Merkel has suggested that the government could help an Opel investor with loan guarantees.

Several suitors have been reportedly interested, with Italian Fiat and Canadian car parts maker Magna International Inc leading the way.

Last week, Magna presented Guttenberg with what the minister called a "rough concept for a commitment with Opel."

Guttenberg has said the German government would wait to determine its role in any full or partial Opel sale after the US government had also weighed in.

Fiat, meanwhile, has pressed ahead with its deal with Chrysler, which is in the midst of bankruptcy.

(Source: Shanghai Daily/Agencies)

Ministry: German economy expected to shrink 6% in 2009

Special Report:Global Financial Crisis

BERLIN, April 29 (Xinhua) -- The German economy is expected to shrink 6 percent this year, the biggest decline in Europe's largest economy since World War II, the Economy Ministry said Wednesday.

However, the ministry predicted that, with the help of fiscal stimulus packages and a revival of export growth, Germany's GDP will see a slight growth of 0.5 percent next year.

The German economy went into recession in the third quarter of last year.

Think tank: German economy to shrink by 4.9% this year

BERLIN, April 15 (Xinhua) -- The German economy will shrink by as much as 4.9 percent this year, the DIW, a Berlin-based economic think tank forecast on Wednesday.

Since World War II, the German economy, the biggest in Europe, has never contracted by more than one percent in a calendar year.

The think tank said in a press release that the biggest economy of Europe, which is experiencing the biggest recession since World War II, will see a slow recovery till 2010.

"Slight recovery in the economy in 2010 is a realistic scenario," Klaus Zimmermann, the institute's president, said in a note released with the forecast.

The DIW said the German economy would suffer severely from the global downturn, forecasting exports would decline by 12.9 percent in 2009, and the investment in equipment and machinery would fall by 14.9 percent.

The think tank also forecast that the German government would post a budget deficit around 3.3 percent of gross domestic product(GDP) this year, overpassing the limit of 3 percent set out by European Union rules.

Earlier in January, the DIW had predicted the German economy would shrink by 1.1 percent this year. However, the think tank said on Wednesday that conditions were so uncertain that it did not want to make a forecast for 2010 yet.

German wholesale prices see record decline in 22 years

Special Report:Global Financial Crisis

BERLIN, April 15 (Xinhua) -- Wholesale prices in Germany dropped 8.0
percent in March compared with the same month last year, the biggest
year-on-year decline since January 1987, the German Federal Statistical Office
said Wednesday.

Compared to February, however, wholesale prices declined 0.9 percent, said
the Wiesbaden-based statistics office.

Crude oil prices have retreated 66 percent from a record 147 U.S. dollars
per barrel in July 2008. As a result, solid fuels and petroleum products were
21.4 percent cheaper in March than a year earlier, the statistical office said.

Prices of grain, seeds and feed declined 42.6 percent in the past 12
months.

Statistics show that Germany's inflation has fallen to its lowest level in
almost 10 years, as the global financial crisis has dragged the European Union's
biggest economy into its worst recession since World War II.

European Central Bank (ECB) council member Athanasios Orphanides told local
media a day earlier that the risk of deflation may push further monetary easing.

The ECB has lowered its benchmark interest rate by 3 percentage points
since early October to 1.25 percent.

The German government has announced plans to spend about 80 billion euros
(106 billion U.S. dollars) over two years to support the economy and boost
consumers' spending power.

The measures include investment in schools and roads, lower
health-insurance payments, tax breaks and incentives to buy new cars.

German exports suffer in February amid world recession

BERLIN, April 8 (Xinhua) -- Data released on Wednesday showed German exports in February 2009 continued a falling trend, which were 23.1 percent lower than the same period in 2008, as the world is witnessing a worsening economic recession.

Germany exported commodities worth 64.8 billion euros (85.4 billion U.S. dollars) and imported commodities worth 56.2 billion euros in February 2009, the Federal Statistical Office (Destatis) said on Wednesday.

Exports were 23.1 percent and imports 16.4 percent below the respective February 2008 levels, Destatis said. Compared with January 2009, exports decreased by 0.7 percent and imports by 4.2 percent.

"The figures show that Germany is suffering particularly under the collapse in global demand," the German news agency DPA quoted a statement from Commerzbank as saying.

The surplus of trade in February also suffered a great loss compared with February 2008, said Destatis. The foreign trade balance showed a surplus of 8.9 billion euros in February 2009, while in February 2008, the surplus amounted to 17.1 billion euros.

Analysts predict that more bad news will come in the future. A study published by Unicredit group said German exports were likely to drop further in the next few months, as the demand has been seriously hurt by the worldwide recession.