Just when you thought the EU had things under control with their $1 trillion shock and awe rescue package, the first signs of doubt appear. The doubting Thomas is none other than Swiss-born Deutsche Bank head Josef Ackermann who appeared Wednesday before a Dusseldorf court to explain Deutsche’s relationship with the failed IKB. Today, comments he made separately about Greece’s solvency are now all over the German-language press.
Here’s how Financial Times Deutschland (FTD) is reporting it (my translation below):
Deutsche Bank chief Josef Ackermann does not believe that Greece will be able to fully repay its loans."I doubt whether Greece will really be in a position to generate this [economic] performance," Ackermann said on ZDF. That would require "unbelievable efforts". The manager did not join in allegations that the German government acted too slow.
Even if he does not believe in a repayment, Greece had to be stabilized, said Ackermann. If the country "collapsed", this would almost certainly spill over into other countries and could lead to "a kind of meltdown." The important thing is that everything is being done so that a restructuring for Greece will not be necessary. This would hit exactly the banks in Germany, "which are now essentially state-owned."
While I understand the intent of the comments to back the government’s actions, they have created quite a stir because of the implication that Ackermann believes Greece is insolvent. And this is a sensitive subject since the German electorate is hopping mad about the rescue package. In fact, FTD ran another story today under the headline "Ackermann: Einfach mal den Mund halten" (Ackermann: Just keep your mouth shut).
The French media have picked up on this as well. Below are a few of other articles in the German- and French-language press referring to this gaffe. Enjoy.