Finance

Salzburg / Vienna. For the 4400 employees at the BMW engine plant in Steyr, Upper Austria, the discussion is undoubtedly not very entertaining: Many experts are talking about the end of the internal combustion engine, and a number of manufacturers have already announced a specific point in time for the complete switch to electric cars (including Jaguar, Audi, General Motors ), and several countries, including Austria, are calling for the EU to set a year from which new vehicles with internal combustion engines will no longer be registered.

Does all of this mean that the engine plant in Steyr – the largest in the world in the BMW Group – has an expiry date? “We are aware of the trend (against the internal combustion engine, note),” said Alexander Susanek, managing director of the plant in Steyr, on Thursday at a video conference with journalists. “But we are working hard to ensure that the work does not have an expiration date.”

They invested 350 million euros last year, taking one development into account, namely the decreasing interest in diesel engines. The diesel engine once dominated the assembly lines in Steyr, but last year it only made 39.5 percent of the engines produced. 60.5 percent were gasoline engines.

They are trying to get orders in the field of electromobility, explained Susanek. BMW is currently converting its main plant in Germany for e-cars, and after making appropriate investments, electric drive systems could also be manufactured in Steyr.

The plant came through the corona crisis last year with a black eye. At the beginning of the pandemic outbreak in spring, production was shut down for five weeks, there was short-time work until June, and production was back to normal from August. 996,636 engines were produced, 18.8 percent less than in 2019. Sales were just under three billion euros.

Gains in market share

“Furthermore, around half of all new BMW and mini vehicles with a diesel or gasoline engine sold worldwide have a heart from Austria,” emphasized Susanek.

In terms of car sales, BMW was able to increase its market share in Austria with falling sales, as Christian Morawa, head of BMW Austria, reported. The number of new registrations fell by 18 percent to 18,381 units, but it reached fourth place in the statistics with a market share of 7.4 percent. Overall, the turnover of the BMW Group in Austria in the last crisis year was 5.8 billion euros, a decrease of 16 percent compared to 2019.

BMW's profit falls

In the group as a whole, 2020 ended with global sales of almost 99 billion euros, a minus of five percent, as the carmaker announced in Munich on Thursday. In the end, there was a surplus of 3.86 billion euros, almost a quarter less than in 2019.

At 2.7 percent, the profit margin was below the level of the previous year and far from the long-term goal of eight to ten percent. The pre-tax profit collapsed by more than a quarter to 5.2 billion euros. The dividend for the ordinary share listed in the DAX should amount to 1.90 euros, after 2.50 euros in 2019.

In the second half of the year, sales in China slowed the crash. As of July, the car company brought in a pre-tax profit of a good 4.7 billion euros, which is almost ten percent more than a year ago. Deliveries also increased significantly during the period.

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A check for $ 1,400 in your mailbox? It invites you to dream: a new refrigerator, have the pick-up repaired or pay off the next installment – there are enough opportunities for Americans to spend the money they had in the context of the 1.9 trillion dollars (1.6 trillion Euro) heavy economic stimulus package will soon flutter into the house.

Experts are now assuming that some of the recipients will not put the free money distributed by the state into consumer goods as planned, but prefer to rely on the booming stock market. And that it will probably give wings to those stocks that have already won in previous aid packages. “I think a lot of the stimulus money will go into the market, and I think it will mostly be a catalyst for growth,” said Randy Frederick, vice president of trade and derivatives at finance broker Charles Schwab.

The US Congress passed the aid package initiated by President Joe Biden – one of the largest in US history – on Thursday night. It is supposed to get the economy shaken by the corona pandemic going again, also by boosting private consumption with a rain of money. Every US citizen who earns less than $ 80,000 a year therefore receives $ 1,400. Tax experts believe the Internal Revenue Service (IRS) will be mailing the checks out later this month.

Survey shows interest in stocks

A survey by Deutsche Bank of 430 private investors last month showed that they want to invest an average of 37 percent of the funding directly in shares. Parag Thatte, strategist at Deutsche Bank, calculates that if only people with online accounts would spend this money on stocks, another $ 25 billion would flow to the stock exchanges. If all recipients of the “stimulus checks” put money into the stock market in the same ratio, up to 150 billion dollars would even be pumped into the stock markets. The US Dow Jones share index is already trading at a record level.

Meanwhile, US equity funds are seeing record inflows of about $ 15 billion per month. “The additional funds from the stimulus packages could be considerable, especially if they are used quickly,” stressed Thatte. Goldman Sachs strategists recently raised their estimate of net household equity demand in 2021 from $ 100 billion to $ 350 billion. The reasons are faster economic growth, higher interest rates than previously assumed and additional economic payments to private individuals. “We expect households to be the largest source of stock demand this year,” wrote the Goldman strategists.

Online brokers are seeing huge influx

The hype surrounding stocks like that of the video game retailer Gamestop, triggered by small investors, could provide an additional boost. Younger investors in particular organize themselves via social media platforms such as the popular WallStreetBets forum and thus drive up the price of certain stocks. Because young adults in particular are more likely to be found at the lower end of the income bracket and are therefore more likely to receive the “stimulus checks”, this trend could be driven even further, says stock market expert Frederick. GameStop shares have been climbing up again for days. Other titles popular in Internet investor forums are also increasing – such as the AMC cinema chain or the headphone provider Koss.

During the corona pandemic, people spend significantly more time at home in front of their screens. That also fueled online trading in stocks. Almost 1.76 million private customers opened an account with the broker TD Ameritrade between January and September 2020 – a record for the company. “People have time, people are interested, and now they are actually beginning to understand what it is they are investing in,” said JJ Kinahan, chief marketing strategist at TD Ameritrade. “You really see an interest from the individual investor that we've never seen before.”

The number of US initial jobless claims has fallen significantly

In the US, the number of applications for unemployment benefits fell surprisingly sharply in the past week. In the week ending March 6, 712,000 initial applications were made, according to the US Department of Labor. That is 42,000 fewer applications than the week before.

However, the ministry corrected the value of the previous week slightly upwards. According to this, 754,000 auxiliary requests were made in the week of February 27, after 745,000 requests had initially been reported. According to the ministry, around 4.1 million people are currently receiving unemployment benefits.

Despite the decline, the situation on the American labor market remains tense. In the period before the outbreak of the corona crisis, around 200,000 initial jobless claims were made per week in the United States.

Initial jobless claims are an indicator of short-term developments in the US labor market. The job market was hit hard by the corona crisis. Many millions more are still unemployed than before the crisis.

The rise in inflation in the eurozone is of little concern to ECB President Christine Lagarde.

According to ECB President Christine Lagarde, the billion dollar aid package to support the US economy will also have an impact on the European economy. “There will be some effects,” said Lagarde on Thursday after the interest rate meeting in Frankfurt. “That's pretty clear.” This applies to foreign trade, for example, as well as to inflation expectations. The ECB will take this into account in its future forecasts.

With the 1.9 trillion dollar (1.60 trillion euros) economic stimulus package from US President Joe Biden, the consequences of the corona pandemic are to be cushioned in the USA and the economy is boosted.

Lagarde is relaxed about the expected rise in inflation in the euro area this year. It is possible that the rate could reach two percent by the end of the year, she said on Thursday at the press conference after the interest rate meeting. But the ECB will “see through” this development.

The increase is expected to be temporary and will not lead to a fundamental rise in prices. The prerequisites for this were lacking in the economy, which was underutilized due to the consequences of the pandemic, also because wage pressure could not build up under these conditions.

ECB expects 1.5 percent inflation

The ECB economists expect consumer prices to rise by 1.5 percent this year. As recently as December, the forecast was 1.0 percent. 1.2 (1.1) percent are forecast for 2022 and 1.4 percent for 2023, unchanged.

In February, as in January, inflation in the euro area was 0.9 percent. Previously, consumer prices had fallen for several months in a row in the wake of the pandemic. But annual inflation is likely to increase significantly in the next few months – mainly due to rising energy costs. Because from spring 2020, the virus crisis had hit large parts of the global economy, which had led to a decline in energy demand.

Queues in front of Ikea

Shopping for groceries and furniture or decorative items together? A cooperation between Ikea, Billa and Merkur makes this possible. The innovative concept.

Click & Collect experienced a turbo boost in the corona pandemic in Austria. Now Ikea wants to go one step further together with the Rewe group (Billa and Merkur). And it works like this: As usual, you shop online via the Ikea website or the smartphone app in the furniture store and order the goods. Instead of having them delivered to you or picked up in the market, you specify a Billa or Merkur market as the pick-up location.

Yes, you read that right! The Ikea shopping can now be delivered to the parking lot of a participating supermarket – so you can also take the ordered decorative items or furniture with you when shopping for groceries. For this purpose, a pick-up time window can be selected in the Ikea shopping cart before the actual payment. In this time window you just have to be near the “pick-up station” and you can get your goods straight away.

Ikea emphasizes that this form of Click & Collect is possible with one condition: “Please note that only products that have at least one freight forwarding item and are not sent as a pure package can be picked up as Click & Collect in your area,” so that Companies. The goods are delivered by truck to take them to their own vehicle, if the supplier also has Ikea shopping trolleys with him.

It is important to think about the size of the goods ordered, says Ikea. Anyone who has bought bulky goods should therefore bring helpers with them for loading. And: “Please pick up your order within your selected pick-up time window, as there is no waiting option for our truck after the pick-up time window has expired,” says Ikea. Alternatively, you can contact a hotline to report delays. The Click & Collect at the supermarket costs ten euros, according to Ikea.

The miracle cure for the crisis saves tens of thousands of jobs – but some employees face a nasty surprise with their tax return due to progression.

For many companies and millions of employees in Germany, short-time work is the saving anchor in the corona pandemic. But when it comes to the tax return in the following year, it turns out that some people face a nasty surprise: because although the short-time allowance itself is tax-free, the employees could have to pay back payments.

As the German government announced in response to a request from the left in the German Bundestag, the tax authorities are expecting around 1.6 billion euros for the 2020 tax year due to the so-called progression proviso on short-time work benefits.

This reservation states the following: Taxes should take into account the entire income of a citizen. For this reason, short-time working allowances and other state benefits are added to normal income to determine the tax rate. The originally tax-free short-time work allowance can therefore ensure that the personal tax rate at which the remaining income is taxed increases.

Only when the income tax return is made is a final check of how much tax an employee has to pay for his wages. This is compared with how much tax he has already paid through the wage tax deduction. If less was deducted than required, there may be an additional tax claim.

According to the German Ministry of Finance, it is very difficult to say in general terms in which cases this happens with employees on short-time work. That could be the case, for example, if you have higher additional income or a spouse with a good income. But it also depends on interest income, the scope and length of short-time work and the amount of short-time work allowance. In the same way, however, refunds are also possible, for example if the employer has still deducted the usual, then too high, wage tax despite short-time work. “If almost exclusively tax-free short-time work benefits subject to the progression proviso are received, there is no tax to be assessed,” explained the ministry.

Trade union federation calls for tax brake

Scientists at Stanford University have calculated that a single employee with a gross wage of EUR 4,000 and half short-time work is threatened with back payments after just two months of short-time work. With full short-time work, on the other hand, there is money back from the state.

Left MP Sabine Zimmermann assumes that short-time workers are threatened with additional tax claims of several hundred euros per person. The progression proviso also applies to unemployment benefits. However, the government was unable to provide any information on the associated additional tax revenue.

Zimmermann criticized: “Anyone who receives short-time allowance has already suffered a significant loss of income.” She told the German Press Agency that there is now a risk of additional tax claims. She called for the progression proviso for short-time allowance to be abolished.

Last year it had been discussed for months whether the regulation should at least be suspended for 2020. That this did not happen was justified in the coalition with the justice to other workers.

The German trade union federation called on the federal government to apply a tax brake. “Anyone who has to accept a significant loss of income with the short-time allowance should not also have to struggle with additional tax payments,” said DGB board member Stefan Körzell. “The coalition must finally act now to prevent further hardships for employees on short-time work.”

According to the DGB, there is a risk of unacceptable additional burdens, especially for employees in the low-wage sector who do not receive an increase in the short-time allowance from their employer. This applies, for example, to parts of the catering trade, retail trade, hotel industry but also other rather medium-sized industries.

Between February 1st and 24th alone, the Federal Agency received short-time work notifications for 500,000 people. In December, 2.39 million people were paid short-time work benefits. The peak was reached in April last year with almost 6 million people.

Short-time work should also be at the center of a joint appearance this Friday by the German Labor Minister Hubertus Heil (SPD) and the chairman of the Federal Employment Agency (BfA), Detlef Scheele. Both want to take stock of “One year Corona” in terms of labor market policy. According to Scheele, short-time working secures employment on a large scale and prevents unemployment.

SPÖ demanded answers from head of department Blümel in the Federal Council.

The working group set up by the Ministry of Finance after the bankruptcy of Commerzialbank Mattersburg last year will present its final report shortly. The department head Gernot Blümel (ÖVP) announced on Thursday in response to an urgent request from the SPÖ in the Federal Council. The SPÖ accused the minister of not participating in the investigation of the “criminal case” and criticized the fact that the financial market supervision had not worked.

In the investigation committee in Burgenland everything that was possible was examined, said SPÖ mandate Sandra Gerdenitsch. The committee came to the conclusion that there was a “collective failure” of the federal authorities: “Why has the control system failed for so many years?” The question also arises as to how the malversations in Martin Puchers Bank could have gone unnoticed for decades by the Financial Market Authority and the National Bank. “This criminal case of a private bank can only be prevented if the banking supervision works, it has not”, the result is 870 million euros in damage, Gerdenitsch justified the urgent request.

In his answer, Blümel stated that the cause was a “large and worrying criminal case” that had to be completely cleared up. Everyone would also have to draw their conclusions in order to prevent similar cases in the future as best as possible. The courts would clarify how many people were involved in the scandal: “In any case, the damage is enormous and the legal proceedings will take years.” You will decide whether and where there have been misconduct, the minister referred to the pending lawsuits.

The minister pointed out that the state of Burgenland, as the auditing association for the cooperative, was responsible for the selection of the auditors: “The decision-makers were aware of this from the start.” The bank and the state have commissioned the auditing firm for decades – this should be questioned. The working group addresses this dual role: “Something like this must be avoided in the future. This is one of the interim results. Blümel did not see the Ministry of Finance as responsible for operational supervision and referred to the FMA and the OeNB in this regard.

Witter comes as the successor to the Austrian Schütz, who came under pressure because of an email to ex-Wirecard boss Braun.

Deutsche Bank Supervisory Board Chairman Paul Achleitner brings outgoing VW CFO Frank Witter to the supervisory body. The 61-year-old is to be the successor to the Austrian Alexander Schütz, who is leaving the Annual General Meeting in May after he was criticized for an email to ex-Wirecard boss Markus Braun. Born in Hanover, Witter has experience in the financial industry: he was CEO of Volkswagen Financial Services AG for several years.

“We are pleased to be able to propose Frank Witter, a proven financial expert and a representative of a leading German industrial company, for election to the supervisory board,” said Achleitner, who intends to quit in May 2022.

A suitable successor for the native of Linz, who has been supervisory board boss at Deutsche Bank since 2012, is Deutsche Börse boss Theodor Weimer and the former PwC Germany boss Norbert Winkeljohann, who are already supervisory board members. In principle, Witter also has the potential for the chief position in the body, said several people familiar with the matter to Reuters.

Witter began his professional career with a bank apprenticeship. He joined Volkswagen in 1992 and has been responsible for finances there since 2015. He originally wanted to leave the carmaker in autumn last year for family reasons, but then agreed to extend it by a few months.

Achleitner lost no time in filling the post: Schütz only announced his withdrawal from the supervisory board on Wednesday evening. In February, Schütz wrote in a personal email to Braun that Wirecard should “finish” the business newspaper “Financial Times” because of its critical reports on Wirecard. The bank then distanced itself from Schütz in unusually clear terms. A little later, Schütz resigned from the important positions on the supervisory board.

If you want to sign a new mobile phone contract, you should be well informed.

If the current mobile phone tariff is no longer appropriate and you exceed your data volume every month, it is time for a new contract. You are quickly spoiled for choice. Because in Austria there are well over 100 private customer tariffs with different call and SMS allotments as well as gigabytes of data volume. Often there is also a new top-of-the-line device from Apple, Samsung and Co. You can find out what to look out for before signing a new mobile phone contract.

Check consumption

In order to have any orientation as to what the new tariff must be capable of, it is worth taking a look at past user behavior. “It is important to look through previous bills, what you need in terms of data volume, call quotas or SMS,” says AK consumer advocate Daniela Zimmer about futurezone. You can use this data to optimize your new tariff.

Conversely, it is often advisable to choose a smaller package. Because if you have a contract with unlimited data volume, but hardly make use of it, you usually pay on top. The AK tariff calculator or the comparison portal durchblicker.at serve as a guide when choosing a suitable tariff.

Bond or not?

Austrian tariffs are generally cheap compared to other EU countries. However, many customers change their tariff, especially before public holidays such as Easter or Christmas, when providers offer special promotions. These can be particularly worthwhile for those who have their eyes on a new cell phone. But Zimmer remembers: “A subsidized cell phone can be cheap, but you are bound to the contract for 24 months.”

According to her, combined contracts, i.e. services including end device, were often cheaper in the past. “The current trend is that with a SIM-only contract and a smartphone bought from an electronics retailer, you can often drive cheaper. If you are not satisfied with the tariff, you do not have a 24-month commitment period, ”she says. Price-sensitive consumers also have good deals on virtual operators who rent into the networks of the three major operators in Austria or are run by Drei, Magenta and A1 as low-cost rails.

Network coverage

Before signing a new mobile phone contract, the quality with regard to mobile data traffic should also be checked. According to Zimmer, it is helpful to look at network coverage maps such as those offered by the comparison portal Tarif.at. “They give a rough impression of the supply situation,” says the expert.

You should also find out from the providers whether they will take back SIM cards or contracts if the network coverage at the location does not work properly. “If you've just moved, it's also worth asking your neighbors to see whether the quality of the network coverage is working perfectly at the location,” recommends Zimmer.

Service fee in small print

You should be particularly careful with regard to hidden costs, such as the service fee. According to the consumer advocate, this does not have to be included by the providers, but is to be paid as a basis, similar to the basic fee. “The service fee is at best written down somewhere in small print. But it is important to know what a contract will cost me over the year, ”says Zimmer.

Especially with very cheap tariffs, the flat rate could be even higher and cost between 27 and 29 euros. “That really matters,” she says. An average of EUR 26.59 is incurred for a two-year contract. In any case, the service fee should be requested from the provider.

termination

Once you have decided on a tariff, you have to terminate the current contract. The notice period is one month. Cancellation must be made in writing and signed. Depending on the provider, it can be sent by email, but sometimes only by post. According to Zimmer, despite the digital age, mail is in many cases still safer if the cancellation is sent by registered mail. “Consumers are often unclear whether the cancellation was sent to the correct e-mail address and received. In general, it is advisable to have a notice of termination confirmed, ”says Zimmer.

It also makes sense to note in the document that the resignation should take place at the next possible contractually permissible date. You can also specify the reason for the termination. If he is a reaction to a price increase, for example, according to Zimmer, an extraordinary right of termination applies. “This is effective as soon as the letter arrives”. In this case, you should be sure that you do not want to use your phone number for a while or that you want to take the number with you beforehand.

Prepaid tariffs do not have to be canceled.

Keep phone number

If you want to transfer your phone number to another provider, you must also apply for a so-called NÜVi (number transfer information). Please note that this is valid for 14 days in the event of a cancellation. The new contract should therefore be concluded relatively quickly. If the contract remains in place, the NÜVi is valid for 90 days. In many cases, the new mobile operator will also take care of the number portability if you so wish. Some providers even take over the termination of the old contract.

If you want to stay with the same provider, you should contact them directly and find out about better tariff options. According to Zimmer, however, additional costs could arise if you change tariffs, especially if you switch to a cheaper one. That should be clarified. It is often worth asking whether registration costs can be waived, for example. According to Zimmer, there is little room for maneuver: “These mostly only relate to activation costs,” says the consumer advocate. On average, this fee in Austria costs 53.52 euros.

China has tightened control over Hong Kong. At the end of its annual meeting, the People's Congress approved a change in the electoral system in Beijing on Thursday, which will further curtail the already limited democracy in the Chinese Special Administrative Region. The nearly 3,000 delegates in the Great Hall of the People also adopted the new five-year plan, with which China wants to make itself technologically and economically more independent from the rest of the world.

Image: APA (AFP)

The government wants to boost domestic demand and increase investment in research and development. This is intended to reduce dependency on foreign countries. According to Prime Minister Li Keqiang, China has a lot of catching up to do and wants to promote innovation. The strategy is also a response to the disruption of supply chains caused by US sanctions against China's tech companies and the global recession caused by the corona pandemic.

The People's Congress adopted the electoral reform for Hong Kong almost unanimously. Critics see another blow to the liberal system of the former British crown colony. The action met with outrage in Hong Kong and abroad, especially among the former colonial power Great Britain. “This is Beijing's latest move to undermine space for democratic debates in Hong Kong – contrary to the promises made by China,” said Foreign Minister Dominic Raab. It undermines confidence that China will still live up to its commitments as a leading member of the world community.

The Chinese premier defended the “improvements” to the electoral system designed to ensure that Hong Kong was “ruled by patriots.” After the decision, the committee for the election of the Hong Kong head of government will be enlarged from 1,200 to 1,500 members. In the selection of members, the already dominant pro-Beijing camp will gain even more influence, while the opposition forces will be pushed back.

A newly created “review committee” will also review the candidates for both the election committee and Hong Kong's parliament. This attitude test is about whether they are also “patriotic”. Critics see this practically as a veto right when the candidates are listed. From Beijing's point of view, “patriots” are only candidates who also follow the line of the Communist Party.

It is the second time in nine months that Beijing has tightened the reins in the face of protests and calls for more democracy in Hong Kong. In July, an equally harshly criticized security law came into force in Hong Kong, which has since been used to take legal action against democracy activists. It is directed against activities that Beijing sees as subversive, separatist, terrorist or conspiratorial.

While the fate of Hong Kong overshadowed the meeting, the not freely elected parliament finally approved the government's economic policy, as expected. Prime Minister Li Keqiang expects growth of “more than six percent” this year – after 2.3 percent in the previous year.

China benefits from the fact that it has largely had the coronavirus under control since the summer. Beijing is pursuing a “zero Covid strategy”: It uses strict measures such as curfews, quarantine, mass tests, contact tracing and extensive entry restrictions.

Against the background of growing tensions with the USA, India, Taiwan and neighbors in the East China and South China Seas, defense spending is also expected to rise sharply by 6.8 percent. China's head of state and party, Xi Jinping, called on the military to be “ready to fight” to defend the country's “national sovereignty, security and development interests”. He also called for a “high-profile strategic deterrent”.

At the same time, Li Keqiang underlined the common interests of the People's Republic and the USA. There are many areas for cooperation and he hoped that relations between the two states could develop in a healthy way. This should be based on respect for the respective interests, on cooperation in which both could win, and on non-interference in internal affairs. China will continue to open its economy to foreign investors, Li added.

Li spoke after US President Jen Psaki announced that President Joe Biden's administration was planning a first meeting between US Secretary of State Antony Blinken and China’s senior diplomat Yang Jiechi in Alaska next week. Biden's security advisor Jake Sullivan and Chinese State Councilor Wang Yi are expected to take part in the meeting next Thursday. The Ministry of Foreign Affairs in Beijing confirmed the appointment.