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.

 

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

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

Fit for Future platform selects EU initiatives for simplification and modernisation

Landmark terror finance resolution adopted by Security Council

The “Legend of the Sun” wishes you Happy Chinese New Year 2015 from Brussels

Peacekeeping chief honours Tanzanian troops in Zanzibar, a year on from deadly DR Congo attacks

Crop yields are up in Syria, but higher prices still cause major strain: new UN report

EuroLat: serious concern about migration and support to multilateral trade

19th EU-China Summit: A historical advance in the Chino-European rapprochement

This is how Middle Eastern retailers can keep up with e-commerce

FROM THE FIELD: What do you want to be when you grow up? One day I will…

It’s time to switch to a four-day working week, say these two Davos experts

The European Union’s Balkan Double Standard

South Korea once recycled 2% of its food waste. Now it recycles 95%

World Cancer Day: Early cervical cancer diagnosis could save lives of over 300,000 women

How Germany strives to mold ECB’s monetary policy to her interests

Chronic illnesses: UN stands up to stop 41 million avoidable deaths per year

Will the European Court of Justice change data privacy laws to tackle terrorism?

How leaders can use ‘agile governance’ to drive tech and win trust

Mergers: Commission approves acquisition of Nets’ account-to-account payment business by Mastercard, subject to conditions

Norway initiates WTO dispute complaint against US steel, aluminium duties

IMF: World cup and productivity

How to build healthy cities and communities in the post-COVID world

G20 told crucial COP24 climate change conference ‘must succeed’: Guterres

Saudi Arabia must halt air strikes in Yemen, says UN panel

Telemedicine in medical practices and its contribution to quality and accessibility to care

The ECB proposes a swift solution for SMEs’ financing

Trump asked Merkel to pay NATO arrears and cut down exports ignoring the EU

UN’s Grandi slams ‘toxic language of politics’ aimed at refugees, migrants

Accountability for atrocities in Myanmar ‘cannot be expected’ within its borders – UN investigator

African continent ‘an example of solidarity’ towards migrants and refugees: UN chief

How ‘savings circles’ empower women in rural Africa

Visiting North Korea, UN relief chief spotlights funding shortfall to meet humanitarian needs

A brief history of vaccines and how they changed the world

UN health agency team in China to strengthen coronavirus response through partnership

European Investment Bank to borrow €70 billion in 2013

China’s stock markets show recovery signs while EU is closely watching in anticipation of the €10bn investment

Coronavirus global response: EU allocates additional €50 million in humanitarian aid

Greening the Belt and Road is essential to our climate’s future

EU long-term budget: EP still fighting for a good agreement

State aid: Commission approves French scheme deferring payment by airlines of certain taxes to mitigate economic impact of coronavirus outbreak

OECD joins with Argentina to fight financial crime

The Amazon is burning and we’re all watching

Who holds the key to the future of biotechnology? You do

The world has made spectacular progress in every measure of well-being. So why does almost no one know about it?

Victim-centred laws ‘paramount’ to combat online sexual abuse against children

Four things Turkey did for business in the G20

What are antibody tests and can they get the world back to work?

In aftermath of Libya airstrike deaths, UN officials call for refugees and migrants to be freed from detention

DR Congo: efforts to control Ebola epidemic continue, UN food relief agency doubles assistance to affected people

Only one in five countries has a healthcare strategy to deal with climate change

EU budget: Boosting cooperation between tax and customs authorities for a safer and more prosperous EU

The Commission tries to stop the ‘party’ with the structural funds

Aung San Suu Kyi appears at ICJ as UN rights expert urges greater protection for Myanmar activists

EU report: Implementation of reforms continues to bring EU and Ukraine closer together

Blockchain will make sure green pledges aren’t just greenwash: a new initiative by young leaders at the World Economic Forum

Forget GDP – for the 21st century we need a modern growth measure

The next talent opportunity for the digital workplace? Neurodiversity

‘Unconscionable’ to kill aid workers, civilians: UN Emergency Coordinator

EU invests in green projects and bans single-use plastics while climate change requires more to be done

This Filipino journalist is fighting for press freedom in COVID-19 lockdown

Parliament requests further action to save EU tourism

More Stings?

Advertising

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