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Merkel, Ackermann Feud Over Managing Sovereign Debt Crisis
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Ackermann, 62, and Merkel, 56, who have called for solidarity to protect the euro, each have a lot at stake. Deutsche Bank has more than 10 billion euros of government debt in Portugal, Ireland, Italy, Greece and Spain. Merkel is trying to minimize the cost of a rescue to German taxpayers before elections this year in at least seven of the country’s 16 states. While the two agree on the need to salvage Europe’s political union and common currency, they disagree on the means of doing so.
Merkel demanded more concessions from Greece last year before agreeing to provide financial aid, while Ackermann pushed for quicker action to stem the crisis. Merkel also called for sovereign-bond investors, including German banks, to shoulder the costs of future national bailouts. That didn’t sit well with Ackermann, who blamed the chancellor for roiling markets and raising borrowing costs, criticisms echoed by the European Central Bank and governments in Ireland and Spain.
“The whole discussion is unfortunate because the signal was received by the markets in a very negative way and now we have this turbulence,” Ackermann said at an event in Berlin on Nov. 25, as the cost of insuring debt for Spain, Italy, Portugal and Ireland approached record levels.
Meeting in Athens
Differences over crisis management surfaced last February after Ackermann met in Athens with Greece’s Prime Minister, George Papandreou, as the premier tried to stem growing market skepticism about his country’s ability to avoid default. Swiss- born Ackermann, who has led Deutsche Bank since 2002, returned to Germany with a proposal aimed at stopping the sovereign-debt crisis in its tracks: a 30 billion-euro rescue package for Greece to be split evenly between governments and private-sector banks, according to a person familiar with the talks.
Jens Weidmann, Merkel’s chief economic adviser, rejected the idea, citing legal concerns, said the person, who declined to be identified because the talks were confidential. The German chancellor was criticized at home and abroad for refusing to rush to aid Greece before domestic regional elections. She reversed course after it became too costly for the Greek government to borrow in financial markets and German lawmakers on May 7 backed a 110 billion-euro lifeline.
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L'interessante resoconto completo:
Merkel, Ackermann Feud Over Managing Sovereign Debt Crisis - Bloomberg
(...)
Ackermann, 62, and Merkel, 56, who have called for solidarity to protect the euro, each have a lot at stake. Deutsche Bank has more than 10 billion euros of government debt in Portugal, Ireland, Italy, Greece and Spain. Merkel is trying to minimize the cost of a rescue to German taxpayers before elections this year in at least seven of the country’s 16 states. While the two agree on the need to salvage Europe’s political union and common currency, they disagree on the means of doing so.
Merkel demanded more concessions from Greece last year before agreeing to provide financial aid, while Ackermann pushed for quicker action to stem the crisis. Merkel also called for sovereign-bond investors, including German banks, to shoulder the costs of future national bailouts. That didn’t sit well with Ackermann, who blamed the chancellor for roiling markets and raising borrowing costs, criticisms echoed by the European Central Bank and governments in Ireland and Spain.
“The whole discussion is unfortunate because the signal was received by the markets in a very negative way and now we have this turbulence,” Ackermann said at an event in Berlin on Nov. 25, as the cost of insuring debt for Spain, Italy, Portugal and Ireland approached record levels.
Meeting in Athens
Differences over crisis management surfaced last February after Ackermann met in Athens with Greece’s Prime Minister, George Papandreou, as the premier tried to stem growing market skepticism about his country’s ability to avoid default. Swiss- born Ackermann, who has led Deutsche Bank since 2002, returned to Germany with a proposal aimed at stopping the sovereign-debt crisis in its tracks: a 30 billion-euro rescue package for Greece to be split evenly between governments and private-sector banks, according to a person familiar with the talks.
Jens Weidmann, Merkel’s chief economic adviser, rejected the idea, citing legal concerns, said the person, who declined to be identified because the talks were confidential. The German chancellor was criticized at home and abroad for refusing to rush to aid Greece before domestic regional elections. She reversed course after it became too costly for the Greek government to borrow in financial markets and German lawmakers on May 7 backed a 110 billion-euro lifeline.
(...)
L'interessante resoconto completo:
Merkel, Ackermann Feud Over Managing Sovereign Debt Crisis - Bloomberg
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