The German government whipped its €480 billion bank bailout package through parliament in record time, but now the program has run into trouble. The banks are still fighting for survival, the money market isn't functioning properly, and taxpayers' money is being burned....To date, Soffin [Special Fund for Financial Market Stabilization] has approved government guarantees for €90 billion ($126 billion) in loans. After prolonged negotiations with the European Union, Soffin now plans to release the first equity assistance package, worth €8.2 billion ($11.5 billion), for the German bank Commerzbank.Soffin has already received requests for at least another €100 billion ($140 billion) in liquidity assistance. Even German carmaker Volkswagen is now lining up for money....HRE is still the most troublesome case. The mortgage bank is requesting new guarantees at a breathtaking pace. At first, the federal government and other financial institutions assembled a €50 billion ($70 billion) packet to provide the necessary liquidity and keep the Munich-based lender afloat.A short time later, Soffin was forced to approve an additional €20 billion ($28 billion) bailout. The next €10 billion ($14 billion) followed in early December. "What else is coming?" asks a concerned member of parliament, pointing out that a single institution cannot possibly absorb the bulk of the government rescue package.
The German government whipped its €480 billion bank bailout package through parliament in record time, but now the program has run into trouble. The banks are still fighting for survival, the money market isn't functioning properly, and taxpayers' money is being burned.
...To date, Soffin [Special Fund for Financial Market Stabilization] has approved government guarantees for €90 billion ($126 billion) in loans. After prolonged negotiations with the European Union, Soffin now plans to release the first equity assistance package, worth €8.2 billion ($11.5 billion), for the German bank Commerzbank.
Soffin has already received requests for at least another €100 billion ($140 billion) in liquidity assistance. Even German carmaker Volkswagen is now lining up for money.
...HRE is still the most troublesome case. The mortgage bank is requesting new guarantees at a breathtaking pace. At first, the federal government and other financial institutions assembled a €50 billion ($70 billion) packet to provide the necessary liquidity and keep the Munich-based lender afloat.
A short time later, Soffin was forced to approve an additional €20 billion ($28 billion) bailout. The next €10 billion ($14 billion) followed in early December. "What else is coming?" asks a concerned member of parliament, pointing out that a single institution cannot possibly absorb the bulk of the government rescue package.
Prosecutors in Germany are investigating accusations of insider trading at Hypo Real Estate, the Munich-based mortgage lender that has recieved billions of euros in government bailouts -- the most of any company so far -- as a result of risky investments in US subprime loans....Prosecutors believe that the company's former board withheld information from the public about the company's true state for more than a year. ... According to several criminal complaints, HRE managers or their relatives and friends are accused of having sold large numbers of HRE shares before the company first warned of its financial woes on January 15.
Prosecutors in Germany are investigating accusations of insider trading at Hypo Real Estate, the Munich-based mortgage lender that has recieved billions of euros in government bailouts -- the most of any company so far -- as a result of risky investments in US subprime loans.
...Prosecutors believe that the company's former board withheld information from the public about the company's true state for more than a year. ... According to several criminal complaints, HRE managers or their relatives and friends are accused of having sold large numbers of HRE shares before the company first warned of its financial woes on January 15.
The news, if confirmed, may irk Germany's neighbors in Europe. Newspapers are claiming the second economic stimulus package due to be unveiled next month will total just €25 billion rather than the originally planned €40 billion because Germany doesn't want to give other nations an excuse to breach deficit rules.
Steinmeier told the Welt am Sonntag newspaper that the German government also needed to prepare an aid package for German automakers suffering under the global economic downturn. The auto business is Germany's largest industry and biggest export, prompting Steinmeier to label it "the spinal cord of (Germany's) economy." "We must also stimulate the purchasing of automobiles with state incentives," such as tax breaks, said the foreign minister. One in seven German workers is directly or indirectly involved in the car industry, the German auto manufacturers' association VDA has said. New car registrations in Germany fell 18 percent in November against figures from the same month last year, VDA said last month.
Steinmeier told the Welt am Sonntag newspaper that the German government also needed to prepare an aid package for German automakers suffering under the global economic downturn.
The auto business is Germany's largest industry and biggest export, prompting Steinmeier to label it "the spinal cord of (Germany's) economy."
"We must also stimulate the purchasing of automobiles with state incentives," such as tax breaks, said the foreign minister.
One in seven German workers is directly or indirectly involved in the car industry, the German auto manufacturers' association VDA has said.
New car registrations in Germany fell 18 percent in November against figures from the same month last year, VDA said last month.
Sigh... *Lunatic*, n. One whose delusions are out of fashion.
