December 6, 2011
Europe's banks urgently need fresh capital to meet tougher EU rules, but they will have problems raising it amid the current crisis of confidence plaguing the euro zone. The survival of Commerzbank, Germany's second-largest bank, is at stake, and Berlin is considering a full nationalization of the bank if necessary.
In the foyer of Frankfurt's Commerzbank Tower stands a Christmas tree decorated with all manner of glitter. The idea is to brighten up the gloomy mood with a bit of seasonal cheer. Next to the tree is a notice board covered with children's wish lists for the Yuletide. Most of the youngsters want computer games and other forms of amusement -- small wishes, for the most part, that can easily be fulfilled.
It will be more difficult to indulge the man sitting on the 48th floor of the building. If Commerzbank CEO Martin Blessing could make one wish, he would presumably ask for a few billion euros, or that someone would take the bank's ailing subsidiary Eurohypo off his hands, or that the entire sovereign debt crisis would simply disappear.
But banks, along with their managers and owners, are not allowed to pin their hopes on miracles. They need money, as quickly as possible. And since Commerzbank's survival is at stake once again, the major shareholder in Berlin is thinking the unthinkable: One-quarter of Germany's second-largest financial institution already belongs to the state; now the government is considering fully nationalizing the bank if necessary.
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