Axel Weber, Germany’s Bundesbank president, was on Wednesday accused by European competition officials of being misinformed and misguided, after he used a Financial Times interview to attack their handling of the financial crisis.
The European Commission said it was “not helpful for people to make misguided public comments concerning the Commission’s approach to state aid for banks without first discussing the matter with the Commission itself. If Axel Weber had done so, he would have known that the Commission is actively defending the single market and working to ensure a recovery from the current financial crisis … His comments are misinformed.”
Mr Weber’s main complaint was that European Union competition officials appeared intent on “refocusing” banks on national credit and lending operations as they sought concessions in return for government aid given as result of the crisis. Mr Weber said that could hinder economic integration in Europe and harm growth prospects.
But Brussels said there was a “clear misunderstanding” in Mr Weber’s suggestion that the Commission was insisting that banks’ activities be limited to home markets. “If national governments try to make sure that national state aid is first and foremost for lending to the national economy, the Commission insists that there can be no discrimination and lending is supported in all regions, including eastern Europe,” it said.
“Furthermore, the Commission is also making sure that restructuring measures will not divide the single market along national lines,” it added.
Rather, officials said, they were applying state aid rules to ensure four objectives: that banks received support to avoid meltdown; that measures by one member state to help its banks did not create artificial advantages that would kill off banks in other states; that banks were restructured to ensure long-term viability; and that the single market was preserved with no discriminatory conditions attached to aid.
Mr Weber’s attack might reflect irritation – also felt by other policymakers in Germany – that negotiations with Brussels over state aid for Commerzbank, Germany’s second-largest lender, have been long and at times fraught.
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