German banks say no to merger. Merger talks between Germany’s two largest private banks, Deutsche Bank and Commerzbank, came to an inglorious end Thursday. In a joint statement, the banks said they had concluded that the union’s benefits wouldn’t offset the risks and costs. Economists like the German Council of Economic Experts, which advises the German government, had warned against the creation of another too-big-to-fail bank. Like most German (and European) banks, Deutsche Bank and Commerzbank have been struggling with profitability in the era of digitization and exceptionally low interest rates. And in Germany, the problem is exacerbated by the diffuse nature of the country’s banking system, which contains some 1,600 credit institutions, three times more than any other eurozone country. Deutsche Bank’s CEO indicated that his bank will move forward with restructuring plans, and the bank announced expectation-beating post-tax profits of 200 million euros ($223 million). Commerzbank, meanwhile, is being eyed by other banks. In early April, Italy’s UniCredit was reportedly preparing a bid for Germany’s second-largest private bank if the merger talks failed, and the Netherlands’ ING is also said to be interested.
French vessels in Asian waters. U.S. officials told Reuters that a French frigate, the Vendemiaire, sailed through the Taiwan Strait on April 6, shadowed by the Chinese navy. In response, Beijing canceled an invitation for Paris to attend a naval parade held earlier this week to celebrate 70 years since the Chinese navy’s founding. One unnamed U.S. official said they were unaware of previous French military passages through the contentious strait, but a researcher quoted by the South China Morning Post said such operations by France and other countries were not uncommon – they just had not been disclosed before. Whatever the case may be, the United States decided to publicize the passage this time.
Russian warnings for Latin America. The head of Russia’s military intelligence is sounding the alarm in the Western Hemisphere. He said militants affiliated with al-Qaida and the Islamic State are allegedly operating in Latin America, where they have begun to raise money and establish training camps. (It’s an old talking point, but it’s not without its merits – the region is home to a variety of militant groups that engage in illegal activities, and they aren’t above working with other criminal or even terrorist groups.) He also said the U.S. may be plotting to overthrow the governments of Cuba and Nicaragua after it removes Venezuelan President Nicolas Maduro from power. Not for nothing: The Russian Interior Ministry will provide anti-terrorism and anti-narcotics training to Nicaraguan police.
- Poland indefinitely suspended the transit of oil from Belarus through the Druzhba pipeline, citing the sharp decline in the quality of Russian oil coming to Polish refineries through Belarus. As we mentioned Tuesday, Belarus suspended the export of light oil products (gasoline and diesel fuel) to Ukraine, Poland and the Baltic states for the same reason.
- While speaking to reporters at an event in New York, Iranian Foreign Minister Mohammad Javad Zarif proposed a prisoner exchange with the United States. Zarif said his country suggested the idea to the U.S. for the first time six months ago but received no reply.
- The Trilateral Contact Group on Ukraine, which includes Russia, Ukraine and the Organization for Security and Cooperation in Europe, failed to agree on a joint statement for a cease-fire in Donbass during the Easter holidays.
- Russian President Vladimir Putin and North Korean leader Kim Jong Un held talks for three hours in Vladivostok. It was Kim’s first visit to Russia and the first meeting of the two leaders.
- Japanese Prime Minister Shinzo Abe is in Brussels to meet with European Council President Donald Tusk and European Commission President Jean-Claude Juncker. The leaders will discuss strategic cooperation, trade and preparations for the G-20 summit in Osaka in June. The EU-Japan free trade agreement went into force nearly two months ago.
- In comments sure to rankle Washington and some European capitals, Hungarian Prime Minister Viktor Orban described China’s Belt and Road Initiative as “a serious safeguard of worldwide trade and the freedom of the world economy” and said his country would ignore “ideological, external pressure” to avoid the project. Orban was speaking in Beijing at the second Belt and Road Forum.
- In its quarterly Monetary Policy Report released Wednesday, the Bank of Canada revised its 2019 growth projection to 1.2 percent, down from its previous forecast of 1.7 percent made in January. It maintained the benchmark interest rate at 1.75 percent.
- Peru will sign a memorandum of understanding to join China’s Belt Road Initiative, according to China’s ambassador to Lima.