Deutsche-Dresdner merger collapses

Hinrich Kuhls kls at
Thu Apr 6 14:16:30 PDT 2000


>The Blame Game
>At times like these, exercises in blame assignment are likely to be both
>unfair and unproductive for the companies themselves.


>However, for
>investors, it is crucial to know who caused which problems which led to the
>breakup of the merger, because this may give some indication of what the
>players involved intend to do in the future.

??? - Today Dresdner's CEO Walter was forced to resign, although Allianz' CEO Schulte-Noellen just stated it was his deliberate decision. -----

But what are the reasons behind the collapse of the Deutsche-Dresdner merger - politically, economically?

The FT of today: >>The collapse of the merger will come as a blow to corporate Germany. "If I may speak my opinion, I have seen more mature behaviour by companies," Gerhard Schröder, the German Chancellor, said.<<

It looks like that the collapse of the merger once more confirms the illusion that great men make history, and economic history, too. Thus one of the political implications of the collapse of the merger is that Schröder and his Social Democratic Party now will look like the "heroic pathfinders" who lead Deutschland AG from Rhenish capitalism to the anglo-american style of shareholder-value orientated capitalism.

Internationally Schröder has brought pressure to bear to get his candidate Köhler appointed as Managing Director of the IMF. Though Köhler was only his second candidate, he was not the second best, but with his political background deeply rooted in the German Conservative Party he is the best candidate for the purpose in question.

Nationally, Schröder now has the backing of nearly all industrial and financial managers and official organizations of managers and corporations. He now - as happened today in the Bundestag - ridicules and abuses the conservative opposition as "enemy of commerce and industry" - unchallenged by commerce and industry.

But of course Schröder and the social forces he represents do not have the same support at the international level.

Norbert Walter, Chief Economist of Deutsche Bank Group, recently requested an "appropriate" "symbolic answer" to the U.S hijacking of the IMF as outlined in the report of the Meltzer Commission [1]. It might be highly speculative, but it looks like that the development of what caused the collapse of the Deutsche-Dresdner merger could also have been more than a symbolic answer from outside the German banking sector in a situation when both economically and politically international competition is advancing to new stages.


[1] Is the U.S. Hijacking the IMF? (20.03.2000), by Norbert Walter, Chief Economist Deutsche Bank Group. An unpublished answer to Jim Hoaglands column "Germany's Costly Win", Washington Post, March 15, 2000 at

The concluding paragraphs from this article: "The timing of the Meltzer Commission's report, in my view, makes it a real provocation to the international community. It amounts to throwing a lighted match into the gasonline of the dispute of the Managing Director, in which the United States campaigned publicly and aggressively against Mr. Koch-Weser. In doing so, the Administration demonstrated in yet another way the apparent U.S. belief that it somehow owns the institution.

"As a result of this U.S. disregard of its partners' interest, one thing is becoming very clear. Europe wants a strong IMF - and wants to be a strong influence in it. The European voice will be more powerful than the United States might realize. After all, the European countries supply a considerably larger portion of the IMF's capital than the United States. They thus should insist on having an even greater say in the Fund's operations. Consequently, it is appropriate to request a symbolic answer of this perceptional reorientation: a change in the IMF headquarters. Paris would certainly be a most adequate place."

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