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Deutsche Bank boss warns of excessive corona state aid

by Financial Economy

Deutsche Bank boss warns of excessive corona state aid. No more »watering can principle«, more »creative destruction«: Christian Sewing is critical of the state aid to corona. The head of Deutsche Bank calls for the recipients’ business models to be examined.

Deutsche Bank boss warns of excessive corona state aid

The head of Deutsche Bank has warned in clear words against excessive government aid in the corona crisis. “It can’t go on like a watering can. That harms our economy, “said Christian Sewing at the CDU business day. Broadly based government subsidies create false economic incentives in the long run. Companies have to adapt to the new circumstances, even if this is associated with pain.

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“We have to allow a certain amount of creative destruction,” Sewing said. In the past weeks and months, some economists had already warned of a “zombie economy”, among other things when the rules for bankruptcy protection were extended.

The federal government and leading politicians of the grand coalition see it differently, however. You are striving for planning security for companies during the pandemic. For example, regulations such as short-time work allowance have been extended until the end of 2021. The Federal Ministry of Economics is reminding companies of available funds, Bavaria’s Prime Minister Markus Söder said that further state aid would be necessary if the catering trade should remain closed in December. And Finance Minister Olaf Scholz, like Economics Minister Peter Altmaier, emphasizes that the state can provide additional help if it is asked.

Deutsche Bank boss Sewing said that in this situation banks are asked to critically question business models. It must be checked what will still work after the pandemic and what will not. “After the crisis, some things will be less in demand, some no longer, some much more.” The rescue programs that were launched were the right thing to do to quickly cushion a crisis. But now long-term solutions must be discussed. “I still miss out on this topic. That has to be discussed more widely in public. ”

Source: https://www.spiegel.de/

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