Parallel downfalls of Merkel and Deutsche Bank threaten Germany and Europe

German Chancellor Angela Merkel met the French President Emmanuel Macron in Marseille for political talks, on European issues. All smiles but in different ways. Taken 7/9/2018. Photo: Bundesregierung/Bergmann

Only a few years ago, Germany’s stars of pride and accomplishment were personified and embodied in the unparalleled triumphant stories and achievements of Chancellor Angela Merkel and Deutsche Bank. They both had amazed Europe and the world, with their successes in the politico-economic universe. Until the legislative elections of September 2017, and probably sometime earlier than that, Merkel held Europe’s political helm and firmly had been sailing the European Union in the globe’s high seas.

It was the same for Germany’s largest economic group. At that time, and until the summer of 2016, Deutsche Bank was victorious in all and every financial market. Managed from its headquarters in Frankfurt, New York and London, Deutsche’s investment banking was omnipotent all over the world. Today, both Angela Merkel and, more so, Deutsche Bank are considered by many at home and abroad, more of a liability than an asset for the affluent nation.

Signs of descent

This week, the German financial watchdog, Bafin, appointed an investigator in Deutsche Bank, to inquire about money laundering. The lender is under scrutiny by the authorities for slack anti-money laundering practices. On the same day, Tuesday 25 September, Merkel’s trusted colleague Volker Kauder was voted out of the presidency of the governing party’s Parliamentary group.

Kauder had been leading Christian Democratic Union’s deputies in the Bundestag, all along Merkel’s long years of Chancellorship. It was a Party deputies’ rebellion against their President, probably marking the last act of Merkel’s downfall story. But let’s take the two stories from the beginning.

Money laundering

A few years ago, Deutsche Bank’s fast but risky expansion attracted the wrath of the Americans. This European bank had started doing in the US exactly what the New York mammoth Yankee financial conglomerates were doing, and was rather successful. So, early in July 2016, the American central bank, the Fed, the International Monetary Fund and the largest US rating firm, Moody’s, in a synchronized cannonade, issued grave warnings about the health of the largest German lender.

Of course, Deutsche Bank’s problems had started earlier than that. The lender was exposed to the Greek, Irish and Spanish financial crisis of 2010 and was narrowly saved by the ‘Panzers’.

The German government used ruthless political force aided by the European Central Bank, obliging the three poor countries to pay all of Deutsche’s imprudent credits in full to their sovereign borrower. In the case of the Latin American sovereign bankruptcies of the 1980s, the New York banks had shared the rescue costs with the Latinos. The Germans didn’t accept to do the same with their EU partners.

Chased from New York

After the 2016 Fed-IMF-Moddy’s salvo against Deutsche Bank, the US Department of Justice took the tally and started chasing the German lender, loading it with billions in fines. Soon, Deutsche had to summarily leave the New York investment banking hub and also slash its London headquarters.

Now, the bank has practically dumped all its investment banking activities being haunted by unprecedented clashes on the highest executive level. The bank’s stock is not regarded anymore as an investment. There is talk about Deutsche Bank disappearing altogether through being absorbed by Commerzbank, Germany’s second largest bank.

Merkel’s fall

Merkel’s parallel course is not so dreadful, though. She is still on the helm of the country but a lot of people think about her replacement. The last incident was the failure of her confidant Volker Kauder to retain his position leading the CDU Parliamentarians. At the same time, Merkel’s cooperation with the Social Democrats in the governing ‘Grand Coalition’ is practically dead. In the latest incident, the country’s head spy was molested by a government which couldn’t come up with a decision about his fate.

The Socialists seem to be convinced that their association with Merkel may prove fatal for their electoral future. Already, they appear third in polls, after the extreme right party, Alternative for Germany (AfD). The Chancellor’s CDU despite still leading in polls, also keeps losing ground. In a dangerous but possible perspective, Merkel’s aura loss and slow downfall, may give a chance to AfD to further increase its appeal at that part of voters.

Shifting to the far right

At the same time, the entire political spectrum of Germany may shift to the far right. If CDU and Merkel choose to confront AfD in their ground, they will not only loose more votes, but they will lead their country and Europe to rough waters.

Xenophobia and violence against ‘difference’ was the fuel to Hitler’s Nazis. It’s a pity for a so affluent country to have neglected a good part of its society in economic disadvantage and exclusion, thus leaving it susceptible to AfD’s extremist rhetoric. Real wages haven’t actually increased for years. If nationalism and xenophobia reach the German middle classes, then Europe will have a lethal problem.

So, Merkel and Deutsche Bank, after having helped Germany become what it is today, now constitute grave dangers. They are threats not only for the country but for the entire continent in the dire era of Trump and Putin.

 

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

Trump’s MAGA policy remains unchanged as EU warns to impose additional retaliation tariffs on US products

UN chief ‘deeply alarmed’ over military offensive in south-west Syria

Taliban-led violence during recent Afghan polls leaves record high numbers of civilians dead – UN

Impressions of China

EU Commission spends billions without achieving targets

Young students envision turning Europe into an Entrepreneurial Society

Financial transactions tax gets go ahead

How to keep our cities cool as temperatures rise

Security Council urged to help spare Syrians from ‘devastation’

Improvements to pension systems have made them better placed to deliver pensions

Four major resources for new European young entrepreneurs

Why and how Germany had it again its own way in Cyprus

Is it too soon to hope for a tobacco free Romania?

The Sting’s Mission

A new era of computing is coming. How can we make sure it is sustainable?

Journey of my life

FROM THE FIELD: Enslaved Guatemalan indigenous women wait for reparations

Scientists have created the world’s ‘first psychopath AI’

UN relief official in Yemen condemns ‘horrific’ attack on passenger buses

Trade barriers: EU removes record number in response to surge in protectionism

Assembly of European Regions @ European Business Summit 2014: Made in Europe – Made of Regions

Libya: ‘Substantial civilian casualties’ in Derna, UN humanitarian chief ‘deeply concerned’

ILO: Unemployment to increase by 8.1 million in 2013-2014

New report says better metrics could have prompted stronger response to the crisis

For the future of Europe youth remains a priority

4 things to know about the state of conflict today

Palestinian students ‘compelled to drop dreams because of financial cuts’

8000 young people in the EP in Strasbourg: “a breath of fresh air for EU democracy”

A Sting Exclusive: “One year on from the VW scandal and EU consumers are still in the dark”, BEUC’s Head highlights from Brussels

Spirit unlimited

Yemen: ‘Living hell’ for all children, says UNICEF; Angelia Jolie calls for ‘lasting ceasefire’

ECB: Monetary policy decisions

Building cybersecurity capacity through benchmarking: the Global Cybersecurity Index

Changing for the change: Medicine in Industry 4.0

UK economy in dire straits: leading banks now officially plan to Brexit too

Canada leading the way on women’s inclusion and empowerment, says OECD

AIESEC Vlog

The US is withdrawing from a 144-year-old treaty. Here’s the context

The historic accomplishment of a seamless EU patent and intellectual property space

Spanish vote – bad luck for Greece: Does Iphigenia need to be sacrificed for favourable winds to blow in Eurozone?

European Union: Retail sales show deep recession

5 ocean success stories to chase away the blues

The experience economy is booming, but it must benefit everyone

Drinking water: new plans to improve tap water quality and cut plastic litter

EU to pay a dear price if the next crisis catches Eurozone stagnant and deflationary; dire statistics from Eurostat

Human rights champions from across the world receive top UN prize

Advancing multilateralism goes ‘hand-in-hand’ with work of the UN

Camino de Santiago – a global community on our doorstep

Parliament demands ban on neo-fascist and neo-Nazi groups in the EU

MWC 2016 LIVE: Stripe gives payments leg-up to startups in emerging markets

The world’s coastal cities are going under. Here’s how some are fighting back

We won’t win the online security war without people power

China hails human rights progress amid calls to close detention camps

MEPs adopt revised rules for road haulage operations in another EU country

The ‘yellow vests’ undermined Macron in France and the EU

EUREKA @ European Business Summit 2014: A European patent system can help European businesses lead industrial research and innovation on a global scale

EU Commission: Once in every 20 beef meals you eat…horse probably with drugs in it

Varna (Bulgaria) awarded European Youth Capital 2017

Minsk “ceasefire” leaves more doubts than safety, with EU already planning steps further

Discovering Europe: Free EU rail pass for 18 year olds

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s