CII Communique - February, 2010

eport
Europe
Germany
Economy
An unexpected sharp rise in the IFO business climate
index in January, which rose to its highest level since
July 2008, offered hope that German economic growth
remains robust. In January the index was at 95.8 points
compared to 94.7 points in December.
The German government’s annual economic report
suggests growth might be 1.6 per cent in 2010, better
than the 1.2 % forecast earlier.
The outlook for German consumer spending, however,
remains bleak. Although domestic demand helped
cushion the impact of the global downturn last year,
the German Consumer Research Organisation reported
that consumer sentiment would fall again in February,
caused by fears about steadily rising unemployment
due to the fact that the Kurzarbeit-scheme is running
out in some industries.
As expected, German GNP shrank by 5 % in 2009.
Businesses
Banks
As Mr Jean-Claude Trichet, European Central Bank
President, will step down in 2011, the German
Government has started a campaign for Mr. Weber,
Bundesbank Chief, to succeed him. At the same
time, intense negotiations for the appointment of the
vice-president of the Frankfurt based institution have
started.
Mr Warren Buffet, the US investor, has expanded his
reinsurance holdings by investing about € 660m in
Munich Re, becoming one of its largest shareholders.
His stake is just above 3 %.
Due to the restarted bonus culture of some banks,
the debate on tighter regulations has begun
again, mainly triggered by influential German
industries.
Automotive
Four large hedge funds launched lawsuits against
Porsche seeking damages of more than $ 1bn
for losses arising from its failed takeover attempt
of Volkswagen. The funds are trying to recoup
massive losses due to market-manipulation in
connection to buying more than 75 % of VW
shares in order to take full control of VW.
The Association of the German Car Industry
(VDA) reported production of nearly 5 million
cars in 2009, about 10 % lower than 2008. The decline
in the production of heavy vehicles was dramatic, more
than 50 % less in comparison to 2008.
Other Industries
New orders in the German Electrical and Electronic
Industry from January to November 2009 sagged by
25 %.
Iceland
Mr. Olafur Ragnar Grimsson, President of Iceland,
invited Indian industry to invest in his country, as
it offers a conducive industrial environment with
handsome returns on overseas as well as domestic
investments.
Addressing a business meeting on 14 January in New
Delhi, Mr Grimsson said an increasing use of renewable
energy could help reduce the looming threat of global
warming. “Geothermal energy can play a significant role
in the electricity production of countries and regions
which are associated with volcanic activity. Capacity
building and transfer of technology are key issues in
the sustainable development of geothermal resources”
he said.
Ms. Preneet Kaur, Minister of State for External Affairs,
India, said that in it’s quest for economic development,
India was seeking to build partnerships across the globe
to source technological solutions to meet domestic
challenges. “Iceland is a leader in exploitation of
geothermal resources and in the fisheries industry,”
she said.
Mr. V K Mathur, Chairman and Managing Director, Inapex
Pvt. Ltd, who represented CII at the meeting, observed
that Iceland’s skills in boat-building, geo-thermal energy
and other hi-technology fields match well with Indian
capability in engineering, and manufacturing.
Nand Khemka, Chairman, Sun Group, Preneet Kaur, Minister of State for External
Affairs, India, Olafur Ragnar Grimsson, President, Iceland, Navin M Raheja, MD,
Raheja Developers Ltd. and V K Mathur, CMD, Inapex Pvt. Ltd.
Communiqué February 2010 | 59