Spiegel: The Euro Endangers German Economy!

• The Euro Endangers German Economy! 
  by http://www.spiegel.de/
  ‘Fear and Uncertainty’
  The common currency union was supposed to benefit the economy of the entire European Union. Now that the euro is struggling, however, it is bringing growth down with it. Germany’s economy, once seemingly immune to the crisis, is now facing mounting difficulties. By SPIEGEL Staff
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  When the board of Commerzbank met last Tuesday, Stefan Otto was supposed to make an appearance. The chairman of Deutsche Schiffsbank, a Commerzbank subsidiary based in Hamburg that is focused on the shipping industry, had been summoned to Frankfurt to present the bank’s financial results. But the presentation was cancelled; Commerzbank had no need for the numbers, having previously decided it no longer wanted anything to do with German shipping.
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  The executive board of Deutsche Schiffsbank was not notified in advance of the parent company’s reversal. The supervisory board was also taken by surprise. Only three months earlier, Commerzbank CEO Martin Blessing had declared the financing of ships and commercial real estate to be part of the bank’s core business. And although it was expected to shrink, Germany’s second-largest bank intended to create a separate segment for the business.
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  But the executives had underestimated the risks that the European sovereign debt crisis presents to Commerzbank, and how much capital the ship and commercial real estate business ties up. Now Blessing has slammed on the brakes. Deutsche Schiffsbank Chairman Otto characterized the parent company’s about-face as the “decision of a cautious businessman and not of a skydiver.”
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  Commerzbank has recently made a huge effort to satisfy and even exceed the capital requirements set by the European Banking Authority (EBA). But if the euro crisis worsens, new gaps could soon open up, say banking industry insiders.
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  Potential Defaults
  In Spain alone, Commerzbank is exposed to the tune of €14.2 billion ($17.9 billion) via investments in banks, companies and the government. The lower the rating agencies assess the creditworthiness of these borrowers, the more capital the bank will have to place in reserve for these investments in the future — to say nothing of potential defaults.
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