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FINANCE

Schäuble defends Ireland euro bailout

Finance Minister Wolfgang Schäuble has insisted Germany’s economy is safe despite the announcement that fellow euro zone member Ireland has asked for an international bailout of nearly €100 billion.

Schäuble defends Ireland euro bailout
Photo: DPA

Schäuble told broadcaster ZDF on Sunday night that he was confident Ireland’s debt crisis could be contained without its spreading elsewhere in the euro zone.

“If we now find the right answer to the Irish problem, then the chances are great that there will be no contagion effects,” he said.

His comments followed the Sunday evening announcement by the European Central Bank that Ireland had – as has long been expected – asked for international help to stabilise its teetering banking system. Various media reported that the bailout was expected to total €80 billion to €90 billion.

Schäuble said the bailout was unavoidable and added it was a matter of ”defending our common currency” rather than any particular euro zone member.

Economy Minister Rainer Brüderle also strove to reassure Germany, saying the country’s celebrated economic recovery was not under threat.

“If help for Ireland does flow, this will not endanger the rebound,” he told daily Bild. “In addition, Ireland must undertake efforts so that its economy becomes competitive. I have no doubt that Ireland will do that successfully.”

Michael Heise, chief economist for Allianz, told the same paper he was confident the crisis in Ireland would not affect the German economy.

The European Central Bank said its governing council “welcomes the request of the Irish Government for financial assistance from the International Monetary Fund (IMF), the European Union and euro-area Member States.”

The request was ”warranted to safeguard financial stability in the European Union and in the euro area,” it said.

“The European Union and euro-area financial support, together with the IMF financing, will be provided under strong policy conditionality, on the basis of a programme negotiated with the Irish authorities by the Commission and the IMF, in liaison with the ECB,” it said.

“We are confident that this programme will contribute to ensuring the stability of the Irish banking system and permit it to perform its role in the functioning of the economy,” the statement said.

Dublin’s request for aid was approved by EU finance ministers during an emergency conference call on Sunday evening.

The Local/DPA/AFP

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FINANCE

German watchdog steps up monitoring of popular N26 online bank

Germany's financial watchdog on Wednesday ordered online bank N26 to step up "internal controls and safeguards" to prevent money laundering and terrorist financing, and said it was appointing a special representative to monitor progress.

German watchdog steps up monitoring of popular N26 online bank
An N26 card. Photo: Wikimedia Commons

Bafin’s announcement marks an escalation of previous warnings to the popular Berlin start-up, which has come under fire in the past for not properly verifying the identities of new customers.

“Bafin ordered N26 Bank GmbH to rectify deficiencies both in IT monitoring and in customer due diligence,” the regulator said in a statement.

N26 “is required to ensure that it has the adequate personnel, technical and organisational resources to comply with its obligations under anti-money laundering law,” it said.

A “special commissioner” would oversee the company’s efforts, Bafin added. Founded in 2013 and known for its transparent debit cards, digital bank N26 is one of Germany’s most high-profile financial technology or “fintech” firms and now has seven million customers in 25 countries.

Its rapid growth has rested in part on fast-track identity procedures for new customers.

READ ALSO: What is the digital German bank N26 that’s about to hit a million users?

In 2019, German business weekly WirtschaftsWoche said it had managed to open accounts using forged IDs.

N26 on Wednesday pledged to “work closely” with Bafin and the special representative.

It said it had already significantly increased measures to prevent money laundering in recent years, “but we recognise that more must be done in this area”.

The coronavirus crisis had contributed to a spike in fraudulent online transactions worldwide, N26 added, “increasing the demands placed on banks in the fight against crime”.

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