Aurelia Butler

“We first really have to reach the 2% lower limit in Germany. We are not there yet,” Merz told broadcaster Bayerischer Rundfunk on Wednesday in response to Trump’s call for NATO members to spend 5% of gross domestic product on defence. “The 2, 3 or 5% (targets) are basically irrelevant, the decisive factor is that we do what is necessary to defend ourselves,” said Merz, leader of the opposition Christian Democrats and favoured to succeed Olaf Scholz.Trump has frequently complained that most NATO members are not paying their fair share, and he floated demanding an increase in NATO defence contributions during the campaign. NATO estimated that 23 of its 32 members would meet its goal of spending 2% of GDP in 2024.Markus Soeder, leader of the Christian Democrats’ Bavarian sister party, the Christian Social Union (CSU), who had chancellor ambitions before ceding to Merz as the conservative candidate, told broadcaster ntv/RTL that military spending must be increased significantly, to “well over 3%.”Germany is only able to meet the current NATO target of 2% due to a special fund, but there is uncertainty about how to maintain that spending level when the fund is exhausted in 2028.Pressure from Trump and a more aggressive Russia have made defence spending a key campaign issue ahead of parliamentary elections in Germany set for Feb. 23, about a month after Trump takes office.Merz has said that Germany can cover future defence spending increases without a special fund, while German Economy Minister Robert Habeck, who is the Greens’ chancellor candidate, said last week that Germany should aim for a target of 3.5%, which he said could only be reached by financing through loans. Dirk Wiese, deputy leader of the parliamentary group of Scholz’s Social Democrats, told RTL/ntv that Trump’s demand was “complete madness.” Wiese also said that he did not support Habeck’s proposal, echoing Scholz, who called it “somewhat half-baked.” More

Global real estate firm Jones Lang LaSalle (JLL) said that property transactions in Germany rose to 35.3 billion euros ($36.42 billion) in 2024, an increase of 14% from a slump in 2023.Colliers, meanwhile, recorded transactions of 36.2 billion euros, up 12%.Both firms forecast moderate growth in deals in 2025, but total transactions will remain well below long-term averages, underscoring the sector’s continued struggles.Michael Baumann, Colliers’ head of capital markets in Germany, said geopolitical uncertainties, the outcome of federal elections next month and the course of the economy “could dent the gradual recovery on the investment markets”.For years, property in Europe and particularly Germany boomed as interest rates fell, spurring demand. But starting in 2022, a sudden jump in interest rates and building costs tipped some developers into insolvency as bank financing dried up and deals froze.Germany has been hardest hit in Europe’s real estate-related rout that has also struck China and the United States.($1 = 0.9693 euros) More

European families are sitting on an ever-growing pile of savings, confounding hopes that consumer largesse will kickstart the region’s stagnant economy.”The saving rate is expected to remain high in the near term, albeit somewhat lower than its most recent peak, partly reflecting the moderating interest rates,” the ECB said in an Economic Bulletin article published on Wednesday. Euro zone households saved 15.7% of their disposable income in the second quarter of last year, the most recent period for which data is available, well above levels around 12% to 13% before the pandemic.This has been weighing on consumption and kept overall economic growth hovering just above zero for just over a year, despite the ECB repeatedly predicting a consumption-led recovery. The main culprit is the 2021/2022 inflation surge which eroded the real wealth of households, the bank said. “With the surge in inflation, households’ real net wealth declined in the past two years, increasing the incentives for them to rebuild their wealth,” the ECB said.A rebound in real incomes and high real interest rates have also boosted savings. However, the ECB maintained its view that household spending would eventually recover.”The likely downtick in the saving rate together with continued strong growth in real labour income are expected to help the momentum of private consumption,” the ECB said. More

LOS ANGELES (Reuters) – A rapidly growing wildfire raged across an upscale section of Los Angeles on Tuesday, destroying numerous buildings and creating traffic jams as more than 30,000 people evacuated, while a second blaze doubled in size some 30 miles inland.At least 2,921 acres (1,182 hectares) of the Pacific Palisades area between the coastal towns of Santa Monica and Malibu had burned by the Palisades Fire, officials said, after they had already warned of extreme fire danger from powerful winds that arrived following extended dry weather.A fire official told local television station KTLA that several people were injured, some with burns to faces and hands. The official added that one female firefighter had sustained a head injury.The second blaze dubbed the Eaton (NYSE:ETN) Fire broke out some 30 miles (50 km) inland near Pasadena and doubled in size to 400 acres (162 hectares) in a few hours, according to Cal Fire. Almost 100 residents from a nursing home in Pasadena were evacuated, according to CBS News. Video showed elderly residents, many in wheelchairs and on gurneys, crowded onto a smokey and windswept parking lot as fire trucks and ambulances attended.Fire officials said a third blaze named the Hurst Fire had started in Sylmar, in the San Fernando Valley northwest of Los Angeles, prompting evacuations of some nearby residents.PALISADES FIREWitnesses reported a number of homes on fire with flames nearly scorching their cars when people fled the hills of Topanga Canyon, as the fire spread from there down to the Pacific Ocean.Local media reported the fire had spread north, torching homes near Malibu.Los Angeles Fire Chief Kristin Crowley had earlier told a press conference that more than 25,000 people in 10,000 homes were threatened.Firefighters in aircraft scooped water from the sea to drop it on the nearby flames. Flames engulfed homes and bulldozers cleared abandoned vehicles from roads so emergency vehicles could pass, television images showed.The fire singed some trees on the grounds of the Getty Villa, a museum loaded with priceless works of art, but the collection remained safe largely because of preventive efforts to trim brush surrounding the buildings, the museum said. With only one major road leading from the canyon to the coast, and only one coastal highway leading to safety, traffic crawled to a halt, leading people to flee on foot.Cindy Festa, a Pacific Palisades resident, said that as she evacuated out of the canyon, fires were “this close to the cars,” demonstrating with her thumb and forefinger.”People left their cars on Palisades Drive. Burning up the hillside. The palm trees – everything is going,” Festa said from her car.Before the fire started, the National Weather Service had issued its highest alert for extreme fire conditions for much of Los Angeles County from Tuesday through Thursday, predicting wind gusts of 50 to 80 mph (80 to 130 kph).With low humidity and dry vegetation due to a lack of rain, the conditions were “about as bad as it gets in terms of fire weather,” the Los Angeles office of the National Weather Service said on X.Governor Gavin Newsom, who declared a state of emergency, said the state positioned personnel, firetrucks and aircraft elsewhere in Southern California because of the fire danger to the wider region, he added.The powerful winds changed President Joe Biden’s travel plans, grounding Air Force One in Los Angeles. He had planned to make a short flight inland to the Coachella Valley for a ceremony to create two new national monuments in California but the event was rescheduled for a later date at the White House.”I have offered any federal assistance that is needed to help suppress the terrible Pacific Palisades fire,” Biden said in a statement. A federal grant had already been approved to help reimburse the state of California for its fire response, Biden said.Pacific Palisades is home to several Hollywood stars. Actor James Woods said on X he was able to evacuate but added, “I do not know at this moment if our home is still standing.”Actor Steve Guttenberg told KTLA television that friends of his were impeded from evacuating because others had abandoned their cars in the road.”It’s really important for everybody to band together and don’t worry about your personal property. Just get out,” Guttenberg said. “Get your loved ones and get out.” More

COLOMBO (Reuters) – Sri Lanka will focus on stronger recovery this year after the island nation posted real GDP growth of 5% in 2024, the highest in seven years, its central bank chief said on Wednesday, hoping to accelerate a rebound from its worst financial crisis in decades. Sri Lanka’s economy crumpled under a severe foreign exchange crisis in 2022, but has posted a faster than expected rally after it secured a $2.9 billion International Monetary Fund (IMF) program in March 2023 and completed a $25 billion debt restructuring in December.The economy grew 5.2% in the first nine months of 2024, outstripping the 3% estimate by the Central Bank of Sri Lanka (CBSL), Governor P. Nandalal Weerasinghe said.”Achieving a transformative acceleration in growth trajectory is essential to catch up and enhance the growth potential. This would also help enhance the debt-carrying capacity of the country,” he said at a annual policy agenda launch.Taking advantage of lower inflation, which reached minus 1.7% in December, Sri Lanka’s central bank set a new single policy rate of 8%, easing monetary settings below previously used benchmarks and setting the stage for stronger private sector credit growth, Weerasinghe added.Inflation is expected to reach positive territory in mid-2025, after which CBSL will focus on maintaining a 5% inflation rate.CBSL will also strengthen monetary policy forecasting, continue to improve its reserve buffers under the IMF program, and introduce a benchmark spot exchange rate in 2025. Weerasinghe said.Sri Lanka will continue recapitalisation of banks, consolidate large finance companies, and review the Statutory Reserve Ratio (SRR) of 2% to increase financial system stability, the Governor added. More

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DAR ES SALAAM (Reuters) – Tanzania’s central bank left its key interest rate unchanged at 6% on Wednesday, holding it steady for a third consecutive policy meeting, with an aim of keeping inflation below its target.When it launched the rate in January 2024, the bank set it at 5.50%. The bank targets inflation of 5%, and consumer inflation has stayed comfortably below that figure.Inflation is forecast to stay around the range of 3.1% and 4% in the first quarter, Bank of Tanzania Governor Emmanuel Tutuba said in a statement.Tanzania’s economy is forecast to grow by about 6% this year from an estimated 5.4% in 2024, its finance minister and central bank governor said in November in a letter to the International Monetary Fund.The economy is forecast to grow 5.7% year-on-year in the first quarter, Tutuba said. (This story has been refiled to fix garbled words in paragraph 1) More