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ORIGINAL FRENCH ARTICLE: http://www.humanite.fr/monde/une-ba...

German bank announces 6000 job losses

Translated Monday 28 January 2013, by Charlotte Foyle and reviewed by Derek Hanson

On Thursday one of Germany’s leading banks Commerzbank announced its decision to cut its workforce by up to 12%, leading to a total of 6000 job losses by 2016. Germany, always portrayed as a role model, has just released figures for negative growth in the last quarter, meaning severance plans are now to follow.

The Commerzbank group, Germany’s second biggest bank, wants to reduce its costs and restore its activities in deposit taking. According to Reuters, the bank intends to cut between 4000 and 6000 full time jobs, with the exact number of proposed posts to be negotiated with the unions during discussions that will begin in February. The bank employs 56,000 people in total, of which 49,000 work full time. It claims these difficulties have arisen due to low interest rates, which is one of the symptoms of an absence of private consumption and business investment, linked to the traumas of austerity. Germany is paying for having plunged its neighbours and main European commercial partners into strict rigor and recession, with German industry having turned primarily towards export.

“These cuts are substantial, even worse than when Dresdner Bank was integrated into Commerzbank”, said a trade unionist, referring to the merger of the two German banks in 2009. Some analysts, however, maintain that the bank should go further still. “These cuts aren’t all that ambitious. I would have thought they’d have been made sooner; 2016 is a long time away”, said Guido Hoymann (Metzler Securities). The decision caused Commerzbank to lose 1.04% dropping to 1.61 Euros in the morning, while the European banking index fell 0.08%. As well as cutting 6000 jobs, Commerzbank is going to extend branch opening hours, meaning certain employees will incur a reduction in pay and some services will be externalised.

Failing capital investment. Since the third quarter of 2012, private business investment has broken down and German growth has been solely dependent on exportation. Businesses are investing less in machinery and other equipment. The only possible reason is a confidence crisis, according to various economic research institutes. Main reasons: austerity in southern Europe, slowing Chinese growth and the uncertainty still surrounding the euro crisis.

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