European Businesses Move Cash to Germany
Although Europe’s political leaders have struggled to implement concrete preparations for the eurozone’s imminent transformation, leaders in the more dexterous business sector are taking action, Bloomberg reported on Friday.
Grupo Gowex, a Spanish Wi-Fi provider, is transferring cash to Germany because it anticipates that Spain will leave the euro. “I don’t trust Spain will remain in the eurozone,” said Jenaro Garcia, founder and ceo of Grupo Gowex. “We moved our cash and deposits to Germany because Spain will come back to the peseta [the former Spanish currency].”
Schroders, one of the UK’s largest fund managers, is avoiding banks that clear through vulnerable eurozone countries and is instead choosing to work only with banks that clear through Germany. Schroders Chief Investment Officer Alan Brown said the firm is trying to reduce risk by accepting collateral in government bonds only from the strongest economies. “It is now a very short list,” Brown said.
German machinery company gea Group AG, meanwhile, is setting maximum amounts that can be held at any one bank. “We are more careful about investment decisions,” said gea ceo Juerg Oleas.
Germany’s central bank reported taking in €11.3 billion (us$15 billion) from non-banks in September of this year, according to data published Friday. Those capital inflows allowed Germany to transform a €47.3 billion deficit in its August balance of capital flows into a surplus of €700 million in September.
Interviews with more than 20 European executives revealed that, in addition to moving their money to Germany, Europe’s companies are also prepared to transfer their headquarters from southern Europe to northern if the eurozone is restructured in the way they anticipate.
Juan Jose Nieto, chairman of Barcelona-based Service Point Solutions, spoke about his company’s preparations for the eurozone’s transformation, saying, “We’ve had to reinvent our business in the last few years because of the crisis. We’re in survival mode.”
Europe’s political leaders are also in survival mode, wrangling to resolve the region’s sovereign debt crisis. But the actions of Europe’s more nimble business leaders provide an unmistakable indication of who the continent is looking to for stability and leadership: Germany.