Focus on Germany London Office October 2008 If we help them, they must help us The German federal government has done the right thing in putting together a rescue package for the financial markets, and in wishing to strengthen the banks’ own capital basis. At present there is no alternative to this emergency measure. Yet, no taxpayers’ money should be wasted on this short-term emergency aid. So the principle“If we help them, they must help us” must be pursued right down the line. Confederation of German Trade Unions(DGB)* The German federal government has done the right thing in putting together a rescue package for the financial markets, and in wishing to strengthen the banks’ own capital basis. At pre­sent there is no alternative to this emergency measure. It is also important that this initiative has been coordinated right across Europe. The financial markets are the nerve centre of our economy. This nerve centre has been seriously damaged. There is a lack of necessary regula­tions and statutory restrictions. The state, as advocate of all its citizens, is the last authority which can restore the confidence * This article was first published by the Confed­eration of German Trade Unions(DGB), Federal Executive, Economic and Fiscal Policy Depart­ment, in the Standpunkt, no.2, 15 th October 2008. destroyed by the bankers and fund managers. The short-term measures must be supported by medium and long-term reforms. The corporate mission of the banks and other financial institu­tions must be redefined and brought in line with the public interest: They must serve the econ­omy. No taxpayers’ money should be wasted on this short-term emergency aid. So the principle“If we help them, they must help us” must be pur­sued right down the line. As a matter of princi­ple, subsidies must only be given in exchange for ownership rights for the state. However, this principle is not consistently enforced in the bill. In addition, the bill does not cover major fields of activity. For example, there is no set of meas­Friedrich 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