Deutsche Bank and Commerzbank merger fails
Deutsche Bank and Commerzbank have ended six weeks of negotiations for a merger saying that the fusion carries too many risks and offers too few advantages. While some commentators voice fears about the consequences, others are relieved.
Disastrous consequences for Europe
Germany's weak point is its banks, and this has consequences for the EU too, columnist Marcello Sorgi comments in La Stampa:
“The impossibility of resolving the German banks' weaknesses internally by merging the two largest banks - Deutsche Bank and Commerzbank, both equally hard-hit - has repercussions for all Europe. Because it is undoubtedly one of the points that the American negotiators will pounce on in the ongoing talks with the EU over import duties. This is an important component of the 'trade war' that is rocking the world. It's no coincidence that after the failure of the fusion project the euro dropped to its lowest rate against the dollar in ten years. The weakness of the euro is certainly not a desirable development in an increasingly chaotic global economic environment.”
Good news for Germany
The Neue Zürcher Zeitung, by contrast, is relieved that the merger talks have come to an end:
“Ultimately there were several arguments against a merger between Germany's biggest private banks than for it. Especially from a macroeconomic point of view. A merger would have intensified the 'too big to fail' problem. After the financial crisis the supervisory authorities were determined to change the fact that many banks were too big and important to let them fail. A merger between Deutsche Bank and Commerzbank would not just hardly solve any of the problems, it would have had precisely the opposite effect.”
Finance minister got lucky again
Even the German Finance Minister Olaf Scholz is probably not entirely unhappy that the merger project has failed, the Frankfurter Rundschau suspects:
“This project could have backfired on him both politically and economically. Even if Deutsche Bank and Commerzbank were both healthy and their business cultures and models had been more compatible, one would have to ask: how can a Social Democratic minister deliberately advance a project that would mean the loss of up to 30,000 jobs? And that would create a considerably larger bank - even though the SPD had sworn after the financial crisis that the banks would shrink rather than grow to solve the 'too big to fail' problem.”