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Capital Markets

Breakingviews: Germany's image goes on trial

Josef Ackerman

Josef Ackermann (pictured) says his trial is an "image problem for Germany, for Deutsche Bank and for me – in that order". This is certainly true, but almost underplays its significance. The trial has become a flashpoint for those opposed to attempts to overhaul Germany's creaking economic model.

Ackermann is being tried for breach of trust when he was a supervisory board member of Mannesmann, the telecoms company sold to Vodafone in 2000. The charge is that he betrayed Mannesmann investors by approving large bonuses for Klaus Esser, the company's then chief executive, and other directors.

For Germany, the case is an embarrassment for a number of reasons. First, it makes the law look like an ass. Ackermann's actions didn't harm shareholders. Esser almost doubled their money by selling Mannesmann just before the technology, media and telecoms bubble burst. The payment was actually proposed by the company's biggest shareholder, Hutchison Whampoa, after he created e10 billion of value for it.

Second, the trial has given a public platform to those hostile to economic reform.

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