Germany might nationalize select banks

3rd February 2009, Comments 0 comments

The German government is considering a controversial plan to nationalize some of its banks.

Berlin -- In order to save its flailing banks, Germany could nationalize them, said a government spokesman.

Germany is also exploring expropriating holdings of private investors.

"Nationalizations, in the sense of a large participation by the state in some establishments, is a possible option," government spokesman Thomas Steg told a press briefing Monday.

A finance ministry counterpart added that "we are looking at all options, and a possible option is expropriation" of private holdings as a last resort.

The question of nationalization and expropriation might first arise with respect to the property lender Hypo Real Estate, which is still threatened with bankruptcy despite state aid worth around 90 billion euros (115 billion dollars).

A holding of 25 percent in HRE owned by the American investment fund JC Flowers might be expropriated.

But Steg stressed that observers should not expect a final decision in the coming days because nationalizations and expropriations would require modifications of German law.


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