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Merkel: No Bailout for Deutsche Bank

183 views · Published 2 October 2016 · 1:20 · Indexed 29 October 2026

Channel: Civil Disturbia · 2016 · News & Politics

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German Chancellor Angela Merkel cannot afford to bail out Deutsche Bank (DBKGn.DE) given the hard line Berlin has taken against state aid inp other European nations and the risk of a political backlash at home, German media wrote on Saturday.
The government denied a newspaper report on Wednesday that it was working on a rescue plan for Germany's biggest bank, as its shares went into a tailspin fueled by a demand for up to $14 billion from U.S. authorities for misselling mortgage-backed securities before the financial crisis.
Germany, which has insisted Italy and others accept tough conditions in tackling their problem lenders, can ill afford to be seen to go soft on its flagship bank, the Frankfurter Allgemeine wrote.
"Of course Chancellor Merkel doesn't want to give Deutsche Bank any state aid," it wrote in a front-page editorial. "She cannot afford it from the point of view of foreign policy because Berlin is taking a hard line in the Italian bank rescue."
The Munich-based Sueddeutsche Zeitung wrote that Merkel would be breaking a promise to taxpayers if she were to bail the bank out, which could spell disaster for her re-election bid next year as the anti-immigration AfD party gains ground.
Shares in Deutsche Bank recovered somewhat on Friday from a record low early in the day after a report that it was close to a cut-price settlement of $5.4 billion instead of $14 billion.
The bank, the U.S. Department of Justice and the German finance ministry all declined to comment on the report.

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