The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Missing a great historical chance?

In a new round of negotiations on state support for German public-sector banks, the European Commission and the German government are urgently seeking a solution. But they are not the only participants in the dispute. The stakes are high for the municipalities and federal states which fear the demolition of the whole public-sector banking system. They are not ready to give in without a fight that might yet widen into a complex legal dispute requiring years to resolve. As the conflict intensifies, the public banks still have the chance to become strong, independent institutions.

       

A legal crisis is brewing in Europe over the status of German public-sector banks that, taken to its extreme, threatens the EU itself.


The European Commission (EC), urged on by private-sector banks, says guarantees for state-owned Landesbanken and municipality-owned Sparkassen are incompatible with EU law.


The public banks refute these allegations and argue that German private banks are seeking to enforce their privatization as a prelude to scooping up efficiently functioning Sparkassen and Landesbanken to cover their own embarrassing failure to build decent banking businesses in Germany.


Will the private banks get their way? Will the dispute over the Landesbanken be taken to the European courts? Or will the Landesbanken and Sparkassen turn the tables on their private-sector opponents and merge into new powerful banking franchises? Investors are looking on with some anxiety.


Already, the German public-bank sector is showing the first signs of change.





You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree