German Media Roundup: Berlin’s bank rescue bonanza
Germany has coughed up €480 billion for a bank rescue package that is grudgingly accepted as a lesser evil than impending global financial chaos by newspaper editorials in The Local’s media roundup.
Chancellor Angela Merkel announced unprecedented measures to help stabilize Germany’s traumatized banking system on Monday as part of coordinated international effort to stem the crisis riling the world’s financial markets.
The government will provide some €80 billion in fresh capital and some €400 billion in guarantees for interbank lending to avoid a credit crunch and to restore rapidly crumbling faith in the country’s ability to weather the crisis unscathed.
Many of Germany’s major newspapers recognized the need to shore up the financial system, but few commentators on Tuesday appeared to give Berlin much credit for taking action and none were particularly excited at the prospect of throwing that much cash into the gaping maw of global capitalism gone awry.
The centrist Berlin daily Der Tagesspiegel says the German government has finally stopped pretending it could remain on the sidelines while other major economies opted for radical intervention in the banking system.
“There’s the chancellor, who along with her entire cabinet, had to free themselves from the illusion that America was America and Germany was something entirely different,” the paper writes in a page one commentary. “And then the supposed European poster child (Germany) had to take lessons from the allegedly national-egotistical neighbours France and Britain that the only effective rescue would be a joint one.”
The left-wing paper Die Tageszeitung addresses the regional impact the rescue package will have on Germany’s states, which are being asked to contribute. In particular, poorer regions like the city-state of Berlin aren’t keen to add to their mountains of debt while trimming money for public services.
“It’s now clear: The Berliners will have to bleed too, and quite a lot,” writes the paper, adding that the German capital will likely have to cut social programmes as its mountain of debt increases by €7 billion. Pointing out that the government claims its rescue package will secure jobs, the paper asks whether Berlin’s money might be better spent elsewhere. “After all, for that sum all of the 50,000 long-term unemployed in Berlin could be paid to have public sector jobs for the next ten years.”
The centre-left Süddeutsche Zeitung opines that it’s time Germany’s top bankers pay their share to bail out the financial mess they created: “They should sacrifice a large share of their income, and part of their wealth, to the state – to save the banks and all the rest that the state will no longer be able to afford. Such as education. Or social programmes.”
The Munich daily’s commentary pulls no punches, taking the banking titans to task for making cash at the expense of the little guy. “Those finance firms that have rushed into investment banking starting in the mid 1990s…have enriched themselves at the expense of the people, at the expense of the state, which will now have to pay for it all.”
But the conservative Frankfurter Allgemeine Zeitung sees some silver lining in recent events.
“Giving the state a stake (in troubled banks) offers the finance ministers and the tax payers an important layer of protection because they will partake in future profits,” comments the paper. “And it gives private investors the feeling they’re dealing with a solvent banks. Then they’ll hopefully be prepared to join the recapitalization too. And that would enable the government to end its engagement as soon as possible.”