Association of German Banks welcomes the European Commission's firm stance in the dispute over use of the name "Sparkasse"

Berlin, 8 August 2006 - As expected, the European Commission has rejected the proposal drawn up by the German government in close collaboration with the German Savings Banks Association on open questions surrounding the non-discriminatory sale of Bankgesellschaft Berlin in 2007 and the associated issue of the restrictions on using the name "Sparkasse" enshrined in Section 40 of the German Banking Act. The Commission is requesting extensive fundamental changes. The Association of German Banks welcomes the Commission's firm stance, which it considers entirely consistent with antitrust law, and feels vindicated in its view that the government's proposal falls far short of solving what are manifest problems. "It is now up to the German government to bring elements identified by the Commission as anticompetitive into line with EU law - this applies both to Bankgesellschaft Berlin and to Section 40 in general," said Manfred Weber, Chief Executive of the Association of German Banks. Otherwise, he added, proceedings before the European Court of Justice and a defeat for the German government were inevitable.

"No one in this country should be interested in a legal dispute of this kind over obvious violations of EU law - neither the German government, not least in view of the German EU Presidency in the first half of 2007, nor the German savings banks," said Weber. It was in their own interests to establish efficient, free-market structures in Germany, too, and finally bring this lengthy dispute with Brussels to a positive conclusion.

A hardening of the official German position towards Brussels, argued Weber, could not only jeopardise the sale of Bankgesellschaft - with the result that billions of euros of state aid would have to be repaid, to the detriment of the city of Berlin and its population. Germany's image in Europe would suffer, too, given that virtually all other member states had long since modernised their banking systems along the lines requested by the Commission - and by no means to the disadvantage of those countries' savings banks. "German policymakers and public-sector banks should have learned over the past one-and-a-half decades that fair competition between private banks, Landesbanken and savings banks will benefit the economy as a whole and, at the same time, is in the interests of customers. I can only appeal to the German Savings Banks Association to call a halt to its repeated attacks on the Commission in its capacity as the custodian of fair competition in the internal market and return to an objective debate." He added that the Association of German Banks was ready to take part in constructive talks at any time.