Is Merkel's Big Bank the Champion Europe Wants?

(Bloomberg) --

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.

Is Merkel's Big Bank the Champion Europe Wants?

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Is Merkel's Big Bank the Champion Europe Wants?

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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?”

Is Merkel's Big Bank the Champion Europe Wants?

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