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

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Euro-Mediterranean Assembly fixes its permanent seat in Rome

African cities will double in population by 2050. Here are 4 ways to make sure they thrive

Global Citizen-Volunteer Internships

Back to the future: flying cars are becoming a reality

Is Eurozone heading for disinflation?

Fostering global citizenship in medical students through exchanges

The miserables and the untouchables of the economic crisis

Disintegrating Tories will void May’s pledge for Brexit deal in seven weeks

We’ll succeed together

Fostering global citizenship in medicine

Counting unemployment in the EU: The real rate comes to anything between 16.1% and 20.6%

Christine Lagarde: the three priorities for the global economy

European Court rules that ECB’s OMT program of 2012 is OK; not a word from Germany about returning the Greek 2010 courtesy

New EU rules ensure better protection for 120 million holidaymakers this summer

How the EU crisis hit countries saved the German and French mega-banks from bankruptcy and still pay the costs

For video game addiction, now read official ‘gaming disorder’: World Health Organization

What next after more sanctions against Russia, will the Ukrainian civil war end?

Jeroen Dijsselbloem new Eurogroup president

What can stop the ‘too big to fail’ bankers from terrorising the world?

Brain Drain remains a crucial and unresolved issue

Presidents of pan-European youth organisations call upon the European Council to preserve the Schengen principles

Can Obama attract Iran close to the US sphere of influence?

Obese people more likely to smoke, says new gene research: WHO

EU Summit consumed by the banks

Nuclear test ban treaty critical to global collective security – UN chief

EU-wide penalties for money laundering: deal with Council

We can build a carbon-neutral world by 2050. Here’s how

Spanish and Polish voters are crying out for an imminent European change while US urge now Germany to change route

The Swiss will pay dearly for voting out fellow Europeans

Millions of young lives ‘at risk’ says UN labour chief, calling for an end to child labour

UNICEF appeals for end to ‘war on children’ in Syria and Yemen

GSMA Mobile 360 Series – Europe – 14 June 2016

Be a part of the World Forum on Future Trends in Defence and Security

This is how people in Europe are helping lead the energy charge

New Report Offers Global Outlook on Efforts to Beat Plastic Pollution

UN says ‘many humanitarian achievements’, one year after ouster of ISIL from Mosul

UN mission welcomes Afghan government’s announcement of Eid holiday ceasefire

INTERVIEW: Advancing human rights, a ‘never ending process’ says new UN rights chief

‘Virginity testing’: a human rights violation, with no scientific basis – UN

Draghi joined Macron in telling Germany how Eurozone must be reformed

Embrace ‘people-centered multilateralism,’ UN-civil society forum urges

‘Safe Eurobonds’: a new trick to betray the south euro area countries

IMF: When high yield goes boom

EU and India re-open talks over strategic partnership while prepare for a Free Trade Agreement

At the edge of humanity: refugee healthcare in Greece and the EU

Further reforms can foster more inclusive labour markets in The Netherlands

France v Croatia: How the World Cup finalists stack up off the pitch

New chapters in EU-China trade disputes

Trade, taxes and other takeaways from Li Keqiang’s speech to the World Economic Forum

The EU Commission lets money market funds continue the unholy game of banks

These countries are ranked highest – and lowest – for human development

It’s not summer holidays what lead to the bad August of the German economy

Zuckerberg preaches that Artificial Intelligence will protect Data Privacy in Facebook whereas Verhofstadt demands the big European state to take charge

How Hawaii plans to be the first US state to run entirely on clean energy

China-EU Summit on 16-17 July 2018: “Work together to address common challenges”, by China’s Ambassador to the EU

Businesses succeed internationally

The EU risks trade relations with China over the Tata hype about steel

When it comes to envirotech adoption, NGOs can lead us out of the woods

Subsidiarity and Proportionality: Task Force presents recommendations on a new way of working to President Juncker

Slight easing of G20 GDP growth in first quarter of 2018

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