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Germany is refusing to take the fall for Europe’s failing banks, indicating that a financial collapse may be in store for the EU soon.
Germany, Banks, Deutsche Bank, EU
Germany does not intend to bail out any failing banks, including Deutsche Bank.
According to Hans Michelbach, a senior lawmaker in Chancellor Angela Merkel’s voting bloc, resistance is growing to the possibility of stepping in to rescue a failing financial institution. Deutsche Bank, a prime candidate for collapse, is facing a fine of $14 billion from the US Department of Justice.
Michelbach told Deutschlandfunk radio that the country is leery of repeating the mistakes of the 2008 financial crisis, where the world’s largest banks, deemed “too big to fail,” were bailed out with taxpayer money:
“I cannot imagine that the state will repeat something like that.”
Since the UK’s referendum to leave the EU, Europe has faced a series of signals that economic difficulties may be on the horizon. Deutsche Bank, before its recent troubles, indicated that European banks, particularly those in Italy, may soon need a $166 billion bailout. European officials believe that Brexit may have been the last straw for the EU, causing the Union to crumble as Germany is given an increased task of bailing out weaker members, which it has increasingly indicated that it does not intend to do.
These weaknesses represent difficulties by the central banking system to properly deal with the continent’s economic challenges. The European Central Bank called on governments to assist in helping the ailing economy as it feels powerless to do so alone.
In the wake of a weakened global financial system, Bitcoin seems very much of a stable and attractive investment option. However, European authorities are not blind to this reality, and as such have implemented new regulations against anonymous Bitcoin trading, ostensibly in order to better combat the financing of terrorist activities. Citizens of Great Britain may be fortunate in that regard, since those restrictions on private Bitcoin trading may no longer apply to them.
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