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Sigmar Gabriel
Image: dapd

Socialist leader targets banks

July 21, 2012

The leader of Germany's main opposition party has accused the banking industry of holding politicians to ransom. Sigmar Gabriel says he plans to do something about it, if the Social Democrats win next year's election.


With Germany's next federal election more than a year off, the leader of the opposition Social Democratic Party (SPD) has announced plans to make the reining in of banks a major part of his campaign.

"The 2013 federal election must become a decision to tame the banking and financial sector," Sigmar Gabriel writes in a thesis paper, excerpts of which were published in the Saturday edition of the mass-circulation daily Bild.

In the paper, Gabriel accuses the banks of a number of grave offenses, including holding national governments to ransom. European governments in particular have been forced to bail out shaky banks due to fears about what their insolvency could inflict on entire economies, he argues.

"Even today they engage in risky dealings, as if the financial crisis of 2008 had never occurred," he writes. "And when things go sour they ‘order' bailouts from the politicians."

Pan-European regulations

The SPD leader argues that the entire banking sector needs to be more tightly regulated - in a new pan-European legal framework, which would make it possible for major lenders to go bankrupt without taking down entire national economies. This, he says, should be funded through a levy imposed on commercial banks.

Gabriel also takes the opportunity to criticize Chancellor Angela Merkel for her leadership throughout the ongoing eurozone crisis, accusing her of bowing to pressure from the banking industry.

"It's not democracy that must conform with the markets but the markets that must conform with democracy," he writes.

CDU reaction

There was little immediate reaction to Gabriel's comments from Chancellor Merkel's Christian Democratic Union (CDU). However during a conference of the Baden-Württemberg wing of the party on Saturday, the CDU's parliamentary leader noted that it was an SPD-led government that loosened up some of Germany's banking regulations. Volker Kauder told delegates at the conference in Karlsruhe that it was Chancellor Gerhard Schröder's SPD-Green Party coalition that first opened the German market to hedge funds in 2004.

"It's not for those who opened the gate to give us advice on how to build them back up," Kauder said.

There are indications that at least some of what Gabriel says in the paper may strike a chord with ordinary Germans. An opinion poll conducted for ARD public television found that 52 percent of those asked opposed the aid package for Spain's banking sector, approved by European finance ministers this past week.

However, asked which party they would vote for if an election were held now, Merkel's Christian Democrat bloc came out on top of Gabriel's SPD by five percentage points.

pfd/rc (dpa, DAPD, Reuters)

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