Focus on Germany London Office October 2008 Save the banks, not the bankers One of the biggest fire brigade operations in the history of the international fi­nancial markets is now taking place: The central banks are flooding the capital markets. A country which doesn’t have a red cent to pay for health insurance for the children of the poor is pumping US$ 700 billion into saving finance market capitalism. Estimates by the IMF put the worldwide cost of the crisis at a prob­able US$ 1,400,000,000,000(1.4 trillion). Confederation of German Trade Unions(DGB)* In the meantime the crisis has reached Europe. At full blast. The stock exchanges are tumbling, banks and insurance companies have been left reeling. Even Josef Ackermann is calling for the state now: A European emergency aid plan is supposed to save bankers and shareholders at home. In secret midnight meetings, European governments agreed on packages to assist and rescue the financial world. Now banks are being nationalised. And taxpayers are having to pledge sums of money which would be enough * This article was first published by the Con­federation of German Trade Unions(DGB), Federal Executive, Economic and Fiscal Policy Department, in the Standpunkt, no.1, 9 th October 2008. to overcome poverty on the old continent com­pletely. Little Ireland alone has to put up EUR 400 billion for its banks. Iceland is faced with national bankruptcy. German banks also dealt enthusi­astically in the toxic waste of the US mortgage market. The German state banks, IKB and Hypo Real Estate are probably only at the beginning of a whole series of threatened bankruptcies. A lot of people gambled. Until very recently Ackermann& Co and their speculative dealings were still producing fantastic profits. Now Ger­man taxpayers are footing the bill. The financial crisis is spreading ever more widely: Soon the debt pyramids of the hedge funds and private equity funds will collapse. A Friedrich Ebert Stiftung London Office The Chandlery(609) 50 Westminster Bridge Road London SE1 7QY, UK Phone+44(0)20 7721 8745 Fax+44(0)20 7721 8746 e-mail website feslondon@feslondon.org.uk www.feslondon.org.uk