Messe Düsseldorf North America - Trade Show Daily

ἀνάγκᾳ δ’ οὐδὲ θεοὶ μάχονται

Posted by Ryan Klemm on Fri, Nov 4, 2011 @ 09:28 AM

Anánkāi d'oudè theoì mákhontai
   - Not even the gods fight necessity.

Simonides of Ceos
Greek lyric poet (c. 556 BC-468 BC)

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Weeeee, it’s sure been a heckofa week!  Just a week ago the stock markets soared after the EU seemingly averted a looming debt crisis.

Here in the US, the media was gushing about “Rocktober” – the best gains on Wall Street during the month of October since sometime in the early 1970s.  Even yours truly thought it noteworthy enough to throw up a clever and witty yet informative blog post about it.

 

Then earlier this week it appeared that the whole shebang was on the verge of unraveling:

  • For some reason, the Greek prime minister unexpectedly announced he was going to put the agreement to a national popular vote referendum.  Chances of passage: ZERO.
  • Stunned EU Leaders, notably those of Germany and France, issued withering responses and threatened to withhold further bailout funding for the cash-strapped country.
  • Stock markets plunged worldwide.  Buh-bye Rocktober.
  • The G20 Economic Summit convened in Cannes, France, coincidentally - whereby everyone could read the Riot Act to the Greek Prime Minister in person.
  • Greek Prime Minister cancels referendum Thursday, now facing a parliamentary confidence vote Friday.

The ancient Greek poet Simonides wrote, "Anánkāi d'oudè theoì mákhontai" ("Not even the gods fight necessity").  Seems the Prime Minister of Greece was unfamiliar with the sentiment.

I've also been wondering all week what the Greek version of Windex is.

Topics: international business, Düsseldorf, Messe Düsseldorf, International Trade, International Trade Shows, Greece, Economic Crisis, Euro

Put some Windex®

Posted by Ryan Klemm on Thu, Oct 27, 2011 @ 13:23 PM

A Part II Primer to The Big Fat Greek Economic Meltdown
Original Post Dated May 2010

When in the 2002 heater hit movie My Big Fat Greek Wedding the father of the bride Gus Portokalos (adroitly played by Michael Constantine) is confronted with any kind of skin ailment, he pans, "Put some Windex."  Somehow that humorous expression strikes me as somberly befitting for this week’s economic developments in Europe where its leaders agreed on a so-called “Windex-Fix” that would impose steep losses on investors holding troubled Greek bonds while simultaneously boosting the effectiveness of the region’s bailout fund.    describe the image
             Michael Constantine / My Big Fat Greek Wedding




This is important stuff to know for American companies involved in exporting, to know the financial situation of international markets, and what market realities your business partners (and competitors!) overseas are facing.  Knowing this will allow you to engage more effectively when you participate at one of our trade shows in Düsseldorf.

A Grand Plan

Under the agreement reached in Brussels in the wee hours of the morning, Greek bondholders agreed to voluntarily write down the value of Greek bonds by 50%, thereby reducing the nation's debt to 120% of GDP from 150%.  The private sector [read: mostly European banks] agreed to the write downs on the condition of a € 30 billion contribution from the public sector [read: European tax payers].

At the same time, the bailout fund (known as the new European Financial Stability Facility) would help cash-strapped countries like Spain and Italy borrow at least € 1 trillion by providing a kind of insurance that would make their bonds more attractive to investors – and thus hopefully preventing them from eventually experiencing a similar fate as Greece.

So why is this important?

New York Times columnist Bill Marsh recently prepared a remarkably interesting article and flow chart putting the entire complicated situation into a clearer and simplified perspective:

At one time, investors viewed lending to the Euro Zone as risk free.  But Greece was borrowing more money to finance itself than it could afford to repay. Similarly, but to a somewhat lesser extent, other countries in Europe (Ireland, Portugal, Spain, and even Italy) were finding themselves sliding down a similar path.  With investors sensing that bond yields would not be met, it looked increasingly possible that the contagion could spread elsewhere – resulting in more difficulty for these countries to borrow money to pay their bills, and risking the investors (i.e. European banks) bottom line: a resulting recipe for huge financial losses, European credit markets to lock up, and certain European financial meltdown to follow.  The shockwave would be felt worldwide – yes, here in the United States.

Is this “putting Windex” treatment going to work? 

Marsh hypothesized that Greek debt will continue to grow and that eventually an orderly, negotiated default will occur, which will ideally be contained thanks to the above mentioned agreement reached in Brussels – and which would shore up the credit of the other countries Ireland, Portugal, Spain and Italy and thereby save the Euro currency and financial collapse of the Euro Zone.

At the moment, it appears an imminent crisis has been averted.  But of course, time will tell.

Topics: international business, Exports, International Trade, International Trade Shows, Greece, Economic Crisis, Euro

Happy New Year and Hello Tax Code Changes!

Posted by Ryan Klemm on Mon, Jan 24, 2011 @ 09:15 AM

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  Tax rules in the Federal Republic of Germany have until now required that companies that participate at our trade shows be subject to the country’s 19% value-added tax (VAT), based on the fact that the goods and services provided were of German origin.  That is to say, VAT was charged by Messe Duesseldorf because of the location that the services were rendered.


The thought process was thus:  A foreign company that participates at a trade show in Duesseldorf must pay the VAT for its exhibit space and/or space-bundled services, then afterward process a refund either itself or by working with a reputable VAT Reclamation Agency.

An expensive proposition to be sure.  Exhibitors have had to front an additional 19% on top of their trade show participation costs for the past four years.  This was always a bit of a hard pill to swallow, especially for American companies used to state and local sales taxes ranging between 0% (Delaware, New Hampshire, Montana, Oregon) and 9% (Tennessee).

Now comes some welcome news:  German tax authorities have announced that effective January 1, 2011 VAT on trade show packages will now be based upon the location where the recipient (i.e. exhibitor) is based and not on the location where the services were rendered.

In a nutshell:  US-based exhibitors no longer have to pay an additional 19% on their invoices issued by Messe Duesseldorf.

As an exception, however, visitor entrance tickets will still include VAT, as will most "a la carte" orders undertaken directly with independent trade show suppliers and vendors. Further information about this can be found on the website of the Taxation and Customs Union of the European Commission.

For exhibitors based in Germany, the calculation of the VAT and their tax obligations and procedures remains unchanged.

Don’t consider this tax advice, rather a description of the changes underway.  Be sure to consult your tax advisor for specific information how these changes may affect your organization!

Topics: Announcements, Germany, exhibiting, Düsseldorf, Messe Düsseldorf, Euro, Value Added Tax

So How Did We Do?

Posted by Ryan Klemm on Fri, Jun 18, 2010 @ 13:45 PM

2009 was a pretty tough year for just about everyone – and boy was it ever a stinker and aren’t we all glad it’s behind us…

All things considered, though, the Messe Düsseldorf Group seemed to weather the storm better than predicted.

The nature of our business is cyclical in nature – some of our events are held every four years or three, many are held every two years and several are held annually.  So after the sun, moon, and stars all aligned for part of 2007 and most of 2008 (all of the leading “mega shows” were held in Düsseldorf back to back over an 18 month period), things slowed down as planned – to the tune of around 50% - but with better results than anticipated:  a sales volume of approximately 256 million Euro (approximately US$ 307 million).

Last year’s leading events:  MEDICA, boot, A+A and CARAVAN SALON.

In 2009, Messe Düsseldorf produced a total of 14 self-owned events and hosted 18 partner and guest events at the Düsseldorf fairgrounds.  A total of 21,961 exhibitors (2008: 32,488) presented their products to 1.123 million visitors (2008: 1.964 million). The hall space rented amounted to nearly 10.5 million square feet (2008: approximately 16 million square feet).

On the international trade fair scene, Messe Düsseldorf organized 37 commissioned events and 21 of its own.  Primarily due to the economic downturn in Russia with sales losses of 30%, Messe Düsseldorf closed its international trade fair business year 2009 with sales of Euro 37 million – 25% percent less than in 2008.

So after the 2009 worldwide recession there are now signs of an overall upward trend.  Based on the trade fair cycles, Messe Düsseldorf predicts a sales increase in 2010 compared to last year.  However, the economic recovery still appears slow, it’s still a relatively quiet year in our show cycle with a few exceptions, and so we are expecting as our CEO called it, a "black zero.”

Let’s see how we do!

Topics: Announcements, Germany, international business, Düsseldorf, Messe Düsseldorf, International Trade Shows, trade fair, Russia, trade show organizer, Euro

The Big Fat Greek Economic Meltdown

Posted by Ryan Klemm on Tue, May 11, 2010 @ 11:42 AM

 

Has anyone been paying attention to what’s been going on in Greece for the past few months?

If no
t, you probably should be – for there are some remarkable things that are happening there right now that have a direct impact on worldwide finance, exchange rates, and exports – all of which are relevant to your company’s export strategies and international trade show participation!


In a nutshell:

Years of unrestrained government spending has left Greece, a country of just over 11 million, with a national debt of upwards of more than 120% of the nation’s annual GDP.   Greece has also not been in compliance for some time with the EU’s rules that Eurozone members keep their deficit below 3 per cent of GDP. (Greece’s deficit is currently reported at 12.7 %.)

Like many countries, the Greek government relies on borrowed money to balance its books. However the worldwide recession of the past couple of years has made this harder to achieve because tax revenues have been falling while public sector spending and welfare payments have been rising.

Investors and market speculators have lost confidence in the Greek government's ability to tax and borrow, and therefore have been demanding increasing interest rates to offset the risk that they might not get their money back.  And the higher it’s borrowing costs, the more difficult it has been for Greece’s economy to outgrow the problem.

To muddy the waters further, Greece is one of 16 members of the Eurozone.  This means it cannot act on its own (i.e. devaluate its currency, cut interest rates, etc), but must defer to the European Central Bank in Frankfurt, Germany.  All the Greek government can really do independently is rely on public sector service cuts – which will undoubtedly extend and deepen the country’s recession, foment civil discord, and further reduce tax revenues which will make it even more unlikely the country can meet its future debt obligations.

The big concern has been that Greece might walk away from its existing debts and simply try to go at it independently – and potentially triggering another round of similar defaults in other indebted European countries (i.e. Spain, Portugal, Ireland), eventually placing the value (and perhaps existence!) of the Euro in peril.


A Solution at Hand?


In the first weekend of May 2010, EU leaders led by German Chancellor Angela Merkel stepped in to build a firewall in an attempt to protect its members from speculative attacks.  (If the EU had not acted to protect Greece from defaulting, the concern was that bond speculators and investors would bail from Spain and Portugal as well, seriously increasing the depth of the problem and threatening not just Europe but the rest of the world’s economy!)

So up to € 70 billion was allocated in an attempt to protect the Euro against further market speculation.  Nonetheless, worldwide markets have continued to sell of the Euro – resulting in its lowest value against the US Dollar in more than a year.


What does this mean for US exhibitors at our trade shows in Düsseldorf?


This infinitely complex problem has been boiled down to its most basic elements for the sake of this article.  But the net result in the short term is that US based companies can expect increased purchasing power abroad (your US$ will go further in exhibit space costs, booth rental, travel expenses, etc), but probably increased European competition because of the weaker Euro, and less purchasing power by European customers.

Topics: Düsseldorf, Exports, International Trade, International Trade Shows, Greece, Economic Crisis, Euro