Emir of Qatar wants stake in Porsche

The hereditary leader of the natural-gas rich Persian Gulf state of Qatar has reportedly expressed interest in buying a stake in the highly-indebted automaker Porsche, Focus magazine reported in its new issue.

Emir of Qatar wants stake in Porsche
Photo: DPA

Stuttgart-based Porsche AG has €3.3 billion worth of debt in needs to repay in the next year at a time when global credit markets remain nearly frozen. In total, the maker of wold-famous sports cars has over €9 billion in debt and is having to make interest payments from using cash from its core business, which is suffering due to the global economic slowdown.

A deal with the Emir of Qatar would give the company access to cash that desperately needs to avoid a crunch, the magazine reported. The article did not mention how much the Emir hoped to invest in the company.

Porsche took on the mountain of debt to finance a takeover attempt of Wolfsburg-based Volkswagen AG, which is Europe’s largest carmaker and many times bigger than Porsche. Last week, media reports said a dramatic change of course was underway and Volkswagen might instead buy Porsche to relieve the smaller company of its debt burden. Currently, Porsche owns 50 percent of Volkswagen and has said it hopes to raise its stake to 75 percent.

In its new issue, Der Spiegel magazine reports that the Piëch family, which controls Porsche, wants to remove current Chief Executive Officer Wendelin Wiedeking and Chief Financial Officer Holger Härter in once the company’s debt issues are resolved.

“It’s not a question of years, rather it’s of a few months,” before the two are replaced, an unnamed source close to the family told Spiegel.

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German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.


With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.