1 German automakers face huge costs, new probe (San
Francisco Chronicle) It's been a bad week for German automakers. Volkswagen
said that a diesel emissions-cheating scandal would cost it an astounding $18.2
billion just for 2015, while Daimler revealed that US authorities are sniffing
around its tailpipes.
Both companies saw a niche with US buyers who wanted
performance, gas mileage and clean air. So they marketed their diesels as
alternatives to boring hybrids. But there is growing evidence that neither was
able to back up the claims without violating pollution standards. Some
management experts put the blame partly on ambitious, top-down corporate
structures.
VW already has admitted to programming diesel cars
so they pass US emissions tests in labs but spew illegal amounts of pollution
on real roads. On Thursday, Daimler said the US Justice Department asked the
company to investigate irregularities in diesel emissions in its Mercedes brand
vehicles.
There also could be some complicity on the part of
European governments. Karl Brauer, senior analyst for Kelley Blue Book, said
governments, as well as Mercedes, VW and other automakers, have known for years
that diesels could meet emissions standards in the lab, but not on real roads.
Germany's transport minister said five automakers
agreed to recall 630,000 diesel vehicles in Europe following an investigation
into emissions levels. The recalls include Mercedes, Opel and Volkswagen and
its subsidiaries Audi and Porsche.
Analysts at Warburg Research think the direct cost
of fines, recalls and settlements worldwide will reach 28.6 billion euros — and
that's excluding any impact on sales and market share. Volkswagen CEO Matthias
Mueller said the company remains "fundamentally healthy" and that he
is "convinced that Volkswagen has what it takes to overcome its
challenges."
2 Don’t blame Panama for the Panama Papers (Isabel
Saint Malo de Alvarado in The Guardian) A trove of leaked documents relating to
offshore corporations with ties to the rich and famous has shed light on the
extent to which the world’s financial and corporate centres are vulnerable to
abuse by those seeking to hide their wealth.
The affair has unfairly come to be known as the
Panama Papers, even though, as the documents show, tax evasion and financial
crimes are global problems to which no nation is immune. The 11.5m documents
revealed by the leak show that the majority of corporations formed by Mossack
Fonseca, a law firm headquartered in Panama and with affiliates around the
world, are in reality incorporated in countries other than Panama.
While we must maintain a presumption of innocence,
Panama recognises our role and responsibility to fully investigate and penalise
any illegal activities in full accordance with our laws. Such investigations
are currently being carried out through the proper institutions in our country,
and are aided by the fact that in recent years, particularly the last 20 months
under President Juan Carlos Varela, Panama has strengthened its legal
mechanisms relating to money laundering.
Panama is setting up an independent commission,
co-chaired by the Nobel laureate Joseph Stiglitz, to evaluate our financial
system, determine best practices, and recommend measures to strengthen global
financial and legal transparency. We expect its findings within the next six
months, and will share the results with the international community.
The term “Panama Papers” is more than an unfair
misnomer – it reflects a deep misunderstanding of Panama’s financial system. As
an international business hub, Panama treats foreign and domestic corporations
the same. The notion that Panama is a “tax haven” for international
corporations comes from the fact that we only tax income derived from Panama,
not from outside.
Many forget that Panama is now a stable democracy
after years of being ruled by a dictatorship. Our efforts to transform our
country into a global economic hub have resulted in the establishment of the
regional headquarters of over 100 transnational corporations.
It is our hope that through Panama’s reform efforts
and increased international cooperation, our country will become even more
attractive to multinational companies that seek to act as responsible global citizens.
Panama’s path to financial transparency is irreversible, but on a global scale
the march must be a collective one. Panama stands ready to play our part.
3 German beer law marks 500 years (BBC) This weekend
marks 500 years since the Duke of Bavaria introduced the
"Reinheitsgebot" or purity law - strict rules controlling what can go
into beer. And beer lovers across Germany will be celebrating at events to mark
the anniversary of the famous food law.
The decree known as the Reinheitsgebot, issued in
Ingolstadt in 1516, had three aims: to protect drinkers from high prices; to
ban the use of wheat in beer so more bread could be made; and to stop
unscrupulous brewers from adding dubious toxic and even hallucinogenic
ingredients as preservatives or flavourings.
They included herbs and spices such as rosemary and
caraway, henbane, thorn-apple, wood shavings, roots, soot or even pitch,
according to the German Brewers' Association (DBB). Duke Wilhelm IV's beer
purity regulation of 1516, which was preceded by earlier rules on beer
production, was gradually implemented in other parts of southern Germany.
It eventually became law in the north and thus the
whole country in 1906. The DBB claims that the Reinheitsgebot is the oldest
currently valid consumer protection law in the world. The original law limited
ingredients to just barley, hops and water. The exact role of yeast in
alcoholic fermentation was not understood at the time and it was only later
that brewers were able to add the micro-organism as a specific ingredient.
The production of wheat beers remained limited in
Bavaria for centuries but is now allowed. So the law now states that malted
grains, hops, water and yeast may be used - but nothing else. Beers brewed
according to the Reinheitsgebot have special status under European Union laws
as a protected traditional foodstuff.
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