German banking: The quest for a German national champion
They’re proud of their embassies in Berlin. Take a tour of the German capital and soon after passing the building shared by five Nordic countries your guide will point to three more embassies clustered together – those of South Africa, India and… Baden-Württemberg. It’s a symbol of Germany’s decentralization that is particularly apparent in its banking system. So is there room for – or even need of – a national champion? Philip Moore reports.
IT SAYS MUCH about Germany that almost two decades after reunification, and several years after the creation of the eurozone, states of the German federation such as Baden-Württemberg feel that they need to maintain individual embassies in the German capital, while the sovereign nations of Denmark, Finland, Iceland, Norway and Sweden get by with a shared building. Then again, the economy of Baden-Württemberg is so different to that of Berlin that it might as well be a foreign country.
Baden-Württemberg is chock-full of world-class exporters, one of which, Porsche, is now under fire for paying its chief executive a package worth €70 million. Since Bayer’s acquisition of Schering last year, Berlin, by sad contrast, is no longer home to a single DAX30 company. Nor does it have much to offer by way of Mittelstand companies. According to the Bonn-based Institute for Mittelstand Research, while 97 of Germany’s largest 500 medium-sized companies are based in Baden-Württemberg, just seven are located in Berlin, only two of which are in the top 100. As your tour guide will tell you, Germany’s capital city’s promotional spin now revolves around the questionable claim that it is Arm aber Sexy (poor but sexy).