Second Thoughts About The Euro

We all have second thoughts about decisions we make. Some of them, however, are about more important topics than others. The leftwing opposition politician who helped to put the euro in place now says it’s time to abandon this currency.

Oskar Lafontaine, Germany’s finance minister when the euro was adopted, now says that the enormous economic issues in southern Europe mean that it’s time to get rid of the euro. As explained on Huffington Post, “struggling eurozone countries have not been able to devalue their currencies to help them cope with the economic crisis that has seen several slip into recession.”

What does Lafontaine propose instead? He now argues that it’s time to restructure Europe’s banking system while creating stricter controls on lenders and going back to the European monetary system that preceded the euro.

Denmark Repeals Tax on Soda and Beer

In a move that would certainly have some gasping (including Michael Bloomberg, the New York Mayor), Denmark has decided to repeal its country’s tax on sodas and beer. The soda tax will be cut in half in July and then eliminated entirely next year.

Their current tax of 52 cents for a 1.5 liter bottle has caused Danes to travel across the border to Germany to buy their soda. Finance Minister Bjarne Corydon told public broadcaster DR that the tax’s repeal would help with a  “powerful growth spurt” to the Danish economy. Last year, a report commissioned by the Danish grocers’ association DSK found that 57% of Danish households have crossed the border to Germany to get their beer and soft drinks in the last year.

The soda tax is part of Prime Minister Helle Thorning-Schmidt’s larger plan to move the Danish economy into the spotlight of competitiveness. She plans to cut the local business tax and tax credits for apartment and home renovations as well. She also plans to reduce the state aid offered to university students – at least they will have tax free soda to drink.

General Motors Financial Company Acquires Equity Interest

In a savvy financial move, General Motors Financial Company, which is a fully-owned subsidiary of General Motors, has just acquired equity interest in Latin America and Europe. As was reported, they have “the top-level holding companies that comprise substantially all of Ally Financial, Inc.’s automotive finance and financial services businesses in Latin America and Europe.”

GM now has exclusive financing operations in Europe, Latin America and North America. They are gaining a significant competitive advantage to offer financing options to customers. They first announced their plans to buy Ally’s foreign business operations in 2012. These included operations in Germany, the UK, Italy, Sweden, Switzerland, Austria, Belgium and the Netherlands, Chile, Colombia and Mexico.

 

 

Eastern European News

Valdis Dombrovskis and George Rohr Discuss Economic Partnerships

The Prime Minister of Latvia has lately been emphasizing the importance of international alliances to his country’s economic development.  During a visit to the US in July to emphasize global economic partnerships, Prime Minister Valdis Dombrovskis spoke at the EU Mission to the UN and met with the President and Co-Founder of NCH Capital, George Rohr.
On September 2nd, back in Latvia, the Prime Minister visited two American-owned high technology companies.  He toured GroGlass and Sidrabe, both owned by funds managed by NCH Capital . While visiting these operations, Prime Minister Dombrovkis emphasized the important relationship between Latvia and its foreign investors and encouraged other Western investors to actively pursue investment opportunities in Latvia, and stressed that Latvia’s highly educated workforce, its geographic location, and its business-friendly climate make for a very attractive destination for growth capital.

George Rohr | Moris Tabacinic | Bulgaria

According to estimates by the Centre for Economic Development (CED), Bulgaria’s Gross Domestic Product (GDP) has witnessed an annual increase of approximately 2 percent in this year’s second quarter — far better than that seen by many if its western European peers.  As a recent report in The Sophia Echo noted, however, while the country’s economy has indeed been seen an encouraging, if modest, growth spurt, it remains “weak and unstable.”  The increase in the GDP figure was mainly “fuelled by the manufacturing and services sectors,” the report continued.  Still, even this minor economic increase shows positive growth, watched closely by opportunistic foreign institutional investors like NCH Capital, co-founded by George Rohr and Moris Tabacinic to manage dedicated capital for US institutions.

There appears to be further positive news for Bulgarian economic growth.  As the CED noted, there will be acceleration of the country’s overall growth rate in the third quarter of this year, a trend which is expected to continue into next year.  The projected growth rate currently sits between 2.5 and 3 percent for this year.