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Recession cuts ranks of German billionaires

Germany's worst post-war recession has cut the ranks of the country's billionaires to 99 and the fortunes of those still making the grade have plummeted dramatically, according to a survey released this week.

Published: 7 October 2009 11:11 CEST

Recession cuts ranks of German billionaires

Photo: DPA

Europe’s biggest economy now has 99 individuals or families with assets of at least a €1 billion ($1.47 billion), down from 122 a year ago, according to Manager-Magazin.

Germany’s 300 richest individuals or families had assets worth €285.6 billion, down €39 billion or 12 percent from 2008.

The Porsche family was the worst hit, with the sports car maker’s failed attempt to take over Volkswagen triggering a 71-percent or €11-billion drop in their assets, the magazine said.

Other major losers included Maria-Elisabeth Schaeffler, whose fortune slumped 92.4 percent in value after her firm’s takeover of auto parts maker Continental. Madeleine Schickedanz, part-owner of the insolvent Arcandor retail group, fell out of the top 300.

Top of the list were the owners of the Aldi chains of discount supermarkets, Karl Albrecht and his brother Theodor Albrecht, who with their families sit on fortunes worth €17.35 billion and €16.75 billion respectively.

Others in the top 10 include Dieter Schwarz, owner of the Lidl supermarket chain; the Otto mail order firm’s family owners; the Riemann family, part owners of consumer goods multinational Reckitt Benckiser; and BMW heiress Susanne Klatten.

The export-heavy German economy has been among the worst hit by the global downturn, and is on course to slump between four and five percent this year, the government said Tuesday.

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How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year.

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’, Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn.

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment?

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024 about 1 percent below the estimated structural level.

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending?

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”. The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”.

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025.

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023.

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write.

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers.

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.”

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