Merkel, Ackermann feud over managing sovereign debt crisis

Written by Reuters | New York | Updated: Jan 29 2011, 06:37am hrs
The leader of Europes biggest economy and the head of Germanys largest bank, partners in a financial rescue two years ago, are rattling investors with their feud about how to manage the sovereign-debt crisis. German Chancellor Angela Merkel and Deutsche Bank AG chief executive officer Josef Ackermann, both of whom are airing their views at the World Economic Forum in Davos, this week, have disagreed publicly over who should bear the costs of future bailouts, international banking regulation and a German tax on nuclear-power producers. The rift, including comments by Ackermann in November that Merkel was spooking markets, underscores wider divisions between Germany, France and other European governments. It has more than personal consequences, threatening to further unnerve investors concerned about Europes ability to tackle the debt crisis after a 750 billion-euro rescue effort failed to stop the contagion spreading from Greece to Ireland. That has political and business leaders hoping for a rapprochement. Were in a phase where markets are reacting very nervously to individual statements and rumors about the debt crisis, said Philipp Musil, who helps manage about $11 billion at Semper Constantia Privatbank

AG in Vienna. This leads to insecurity in the market. Its important what individual states and market participants say. We need more unity.