The emissions scandal ensnaring German carmakers is a risk to Europe’s largest economy, the German Ministry of Finance said yesterday, adding that it was impossible at the moment to quantify its impact.
In its monthly report, the ministry named the issue, which broke out almost two years ago after Volkswagen admitted to cheating US diesel emissions tests, as a threat to Germany, along with Britain’s decision to leave the EU and protectionist trade policies by the US government.
The car industry is Germany’s biggest exporter and provides about 800,000 jobs.
“Risks linked to how Brexit will shape out and future US trade policies remain,” the ministry said. “In addition, the so-called diesel crisis should be classified as a new risk to the German economy even though its effects are not possible to quantify at the moment.”
Strong household and state spending provided most of the impulse for the German economy in the second quarter, when growth was measured at 0.6 percent. Weaker net foreign trade dampened growth, as exports grew less strongly than imports.
The ministry said it expected the industrial sector to continue its upswing in the third quarter, pointing to robust orders and strong business sentiment indicators.
However, the diesel crisis could cloud the German growth outlook, it said.
“Given the importance of the automotive industry they [the effects of the diesel crisis] must be classified in the medium term as a risk to the overall economic development,” it said.
German politicians and auto company bosses agreed earlier this month to overhaul engine software on 5.3 million diesel cars to cut pollution and try to repair the industry’s battered reputation.
EU antitrust regulators are also investigating allegations of a cartel among a group of German carmakers, a measure that could result in hefty fines for the companies.
Gogoro Inc (睿能創意) yesterday launched its first electric bicycle, the Gogoro Eeyo 1, in Taiwan, after unveiling the bike in New York in late May and in France on Tuesday. The company said it would also introduce the series in other European countries such as Germany and the Netherlands. The “Eeyo project” is the fourth of Gogoro’s eight projects that concentrate on smart transportation, which includes Gogoro’s electric scooter, battery swap system and electric scooter sharing service, company founder and chief executive officer Horace Luke (陸學森) told a media briefing in Taipei. “There are various types of city commuters. We will not
BAD RAP: The exchange said Tatung had seriously breached shareholders’ rights and failed to give a satisfactory explanation of its board election dispute Tatung Co (大同) shares yesterday plunged by the maximum daily limit of 10 percent to NT$18.90, the lowest in three months, after the Taiwan Stock Exchange (TWSE) on Tuesday evening changed the company’s classification to a full-delivery stock effective tomorrow. The TWSE’s move follows the company’s failure to give a clear and satisfactory explanation of why it deprived dozens of shareholders of their voting rights during a board election at the annual shareholders’ meeting on Tuesday morning. Under the exchange’s regulations, investors are not allowed to engage in margin trading of a full-delivery stock, TWSE spokeswoman Rebecca Chen (陳麗卿) told
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in