Is Merkel's Big Bank the Champion Europe Wants?
For German Chancellor Angela Merkel, keeping a government stake in a new national banking champion if Deutsche Bank and Commerzbank merge would appear to be the least bad option.
Already facing a potential 30,000 job losses — and a rising risk of a recession — sticking German taxpayers with a likely loss by selling the government's 15.6 percent holding in Commerzbank would be politically unpalatable.
But the return of the interventionist state will anger pro-market conservatives in Merkel’s Christian Democratic Union, the governing coalition’s biggest party, who’ve seen Germany prosper for generations from a hands-off approach.
All this comes at a delicate moment for Merkel. With Europeans companies currently playing Lilliputians to U.S. tech giants such as Amazon, Apple and Google and facing the rise of Chinese state capitalism, she and French President Emmanuel Macron want the European Union to tear up its competition rules to make it easier to build industrial champions. They'll make their pitch to EU leaders in Brussels at a two-day summit starting Thursday.
Moving now to shore up Germany’s stake in the marriage of two struggling banks may not be the best way win over the bloc’s skeptics.
Weapons crackdown | Prime Minister Jacinda Ardern vowed to announce an overhaul of New Zealand’s gun laws by next Monday, 10 days after the nation’s worst mass shooting in modern history left 50 people dead. Gun ownership in the country has risen to become one of the highest in the world, yet its homicide rate remained well below global norms before Friday’s attack. The previous government in 2017 rejected recommendations to tighten regulations. Read more:
Macron’s reversal | Macron seemed to have overcome the worst of the Yellow Vest protests thanks to a “national debate” that he started to allow grievances to be aired. But on Saturday, shops on Paris’s iconic Champs Elysées were torched and 200 people were arrested. The renewed violence has put the French president back in crisis-management mode.
Costly decision | President Vladimir Putin is in Crimea today to mark five years since Russia annexed the peninsula from Ukraine and triggered Moscow's biggest crisis with the West in decades. U.S. and European Union sanctions in response have taken an economic toll, with Russians’ incomes stagnant and foreign investment falling. Yet they’ve had no impact on Russia’s determination to keep Crimea, where it’s spent billions including on a giant bridge to the peninsula.
Dark money | Prime Minister Narendra Modi’s government has loosened campaign finance laws in India, prompting fears that businesses — and foreigners — could wield unprecedented influence over next month’s vote. The new rules allow corporations to fund elections anonymously, permit businesses to bankroll political parties and enable shell companies to be a financial conduit. Spending is set to rise 40 percent to $7 billion — more than the 2016 U.S. presidential poll.
A Thatcher moment | Three decades after molding South Africa’s labor movement into a potent political force, President Cyril Ramaphosa must face them down like then-British Prime Minister Margaret Thatcher did years ago to kick-start a stagnating economy. As Antony Sguazzin reports, his problem is the unions opposing his plans to restructure state companies are key allies of his ruling African National Congress, which faces elections in May.
What to Watch
- U.K. Prime Minister Theresa May is working to win support for her Brexit deal but won’t put it to another vote in Parliament as planned tomorrow unless there's a strong chance it will be approved.
- Chinese leader Xi Jinping will make state visits to Europe from this week as he seeks to bolster trade relationships on the continent while trying to end a trade war with the U.S.
- U.S. Senator Kirsten Gillibrand is officially joining the 2020 presidential race, adding to a crowded Democratic field that’s already shaping up to be one of the biggest in decades.
And finally... Footage of the New Zealand mosque shootings that was pulled down by Facebook, YouTube and other social-media platforms has resurfaced in an unlikely place. Turkish President Recep Tayyip Erdogan screened a montage of videotaped snippets from the attack in an apparent attempt to galvanize his conservative base ahead of March 31 local elections. The main opposition party was quick to reply, with a spokesman asking: “Is it worth showing this bloody massacre in order to gain a few more votes?”
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