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ALLIANCE FO§ DEMOCRACY
bombLetter to the IMF relation to the
Headbombno-value-ECM - 05/12/16
bombLetter to the CDU Youth Union - 14/11/16 bombLetter to the IDW regarding
Headbombthe EFSF’s Financial
HeadbombStatements – 19/10/16
Headbomb+ Correspondence IDW -> MFD 15/11/16
Headbomband MFD -> IDW 16/11/16
bombLetter to the european Financial
HeadbombSupervision relation to the
Headbombno-value-ECM - 03/10/16
bomb14th Letter to the Parliament for Judicial
HeadbombReview of the Free-Trade
HeadbombAgreements - 27/05/2016
bombApplication to the Constitutional
HeadbombCourt for Judicial Review of the
HeadbombFree-Trade Agreements - 27/05/2016
bombBILD - Pillory of Shame - 21/12/15 bombCriminal charge of making a false
Headbomballegation against netzpolitik.org - 17/09/2015
Headbomb+ response of Public Prosecutor in
HeadbombBerlin - 20/05/2016
bombLetter to the Ifo President - 05/11/14 bombComplaint to the German
HeadbombPress Council - 21/11/13
bombLetter to the IMF - 17/10/13
Headbomb+ Supplementary letter 22/11/13
bombLetter to the EU Commission - 17/10/13 bombLetter to the Presidium of the ECB - 17/10/13 bombAgainst the dismissal of
HeadbombFederal President Wulff - 13/06/13
Headbomb+ Response from the Hannover
HeadbombPublic Prosecutor's Office 25/07/13
Headbomb+ Opinion of the Alliance for
HeadbombDemocracy 21/08/13
Headbomb+ Letter to Celle General State Prosecutor’s
HeadbombOffice 10/10/13
bombPetition for the independence of the
HeadbombJudiciary and State Prosecutor - 06/05/13
Headbomb+ response by the Petitions Committee of
Headbombthe German Bundestag - 08/06/16
bombPetition for the introduction of genuine, direct
Headbombdemocracy - 25/04/13
Headbomb+ reply of the Bundestag - 14/11/16
bombPetition against corruption - 25/03/2013 bombCriminal complaint re. Target 2 10/11/2012 bomb1st Constitutional Complaint - against the
HeadbombFederal Government - 21/03/12
bomb2nd Constitutional Complaint - ESM incl.
Headbombsupplement - 12/06/12
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Headbombsupplement - 18/09/12
bomb4th Constitutional Complaint - Federal
HeadbombGouvernment against the ECB (by CJEU)
Headbomb27/09/12
Headbomb+ response of Federal
HeadbombConstitutional Court - 06/06/16
bombPress reports 27/6/12 + 24/10/12 bombSpringer complaint 28/09/11 bombDelayed insolvency bombPetition to the German Parliament 31/05/11 bombPetition to the European Parliament 21/06/11 bomb1st Letter to Members of Parliament 23/06/11 bomb2nd Letter to Members of Parliament
Headbomb26/09/11
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Headbombagainst Corruption 15/10/12 in addition to
HeadbombPetition 25/03/13
bomb9th Letter to the Parliament 24/10/12 bomb10th Letter to the Parliament 05/12/12 bomb11th Letter to the Parliament - 20/05/13 bomb12th Letter to the Parliament - 16/10/13 bomb13th Letter to the Parliament - 10/12/15 bombQuestions to the Bundestag 27/28/06/12 bombTo the members of the Bundesrat 14/06/12 bombTo the minister of finance 12/06/12 bombSecond Letter to the Finance
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bombObjection to Hartz IV - Judicial Review
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bomb21/03/11
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bomb05/10/11
bombOpen letter 16/18/02/11





Bank rescue with state support

The rescue of insolvent banks through state support is a legal and economic anomaly. It is governed by the “Financial Market Stabilisation Act" (Finanzmarktstabilisierungsgesetz - FMStG) and in its justification. The issue of this anomaly is not broached in the legislation itself. There is therefore no alternative to the situation – according to the legislation – because the financial sector must be stabilised. The legislature refuses to consider possible alternatives. The Alliance for Democracy believes: The delaying of insolvency must also apply for the banks, in order to save not the banks, but the people. The relationship to insolvency regulations is addressed at only two points:
  1. The appeal rights of the insolvency administrator are curtailed – for the event that the bank later becomes insolvent despite state intervention.

  2. The obligation to file for insolvency is moderated – according to the previous legal situation, application for insolvency must be made immediately in case of excessive debt; the formula now runs: a positive forecast as a going concern (despite excessive debt) means that no such application has to be made (see p. 12 of the justification of Art. 5). The text states (§ 19 II InsO): “Excessive debt exists when the debtor’s assets no longer cover existing liabilities, unless the continuation of the company is most likely under the circumstances.”

The Financial Market Stabilisation Act (FMStG) has therefore changed the definition of insolvency. Companies that previously had to apply for insolvency because of excessive debt can now avoid this by citing the going-concern forecast. A correlation between the FMStG and delaying insolvency is not discussed, so far as can be seen. The delaying of insolvency is the late filing of an application for insolvency. § 15a InsO states:

(1) If a legal person becomes insolvent or over-indebted, the members of the representative body or the liquidator must make application for the institution of proceedings without undue delay, and not later than three weeks after the onset of insolvency or over-indebtedness. The same applies for the representatives of shareholders or liquidators authorised to represent the company in the case of a company without legal personality, in which no personally liable shareholder is a natural person; this does not apply if another company belong to the personally liable shareholders, in which a personally liable shareholder is a natural person.

(2) In the case of a company in the sense of Para. 1 Sentence 2, Para. 1 applies accordingly if the representatives of shareholders authorised to represent the company are for their part companies in which no personally liable shareholder is a natural person, or continues the association of companies in this manner.

(3) If a private limited liability company is without any managing director(s) also every shareholder, if a public limited company or a cooperative society is without any managing director(s), every member of the supervisory board is obliged to file an application for insolvency, except when the respective person is not aware of the insolvency and the over-indebtedness.

(4) Anyone who fails to make such application, or fails to do so properly or at the appropriate time, in contravention of Para. 1 Sentence 1, also in conjunction with Sentence 2 or Para. 2 or Para. 3, may be punished with a fine or a term of imprisonment of up to three years.

(5) If the offender acts negligently in the cases of Para. 4, the punishment is a fine or a term of imprisonment of up to one year.

The capitalisation of the banks means that either the over-indebtedness (liabilities exceeding the assets) does not apply, or that the forecast as going concern is positive. Formally therefore, insolvency is prevented rather than delayed.

This gives rise to the question of distortion of competition and unequal treatment and the de facto overriding of the market forces. At the moment the following applies: Companies (banks) which are mismanaged are no longer punished by the market, but rewarded with public funds.

The classic example is the so-called “Holzmann rescue”. Mario Monti (then Commissioner for Competition) approved the Schröder aid because there was allegedly a coherent restructuring concept with good prospects of success. This is however clearly open to question. Holzmann was thoroughly unsound and bound by long-term, completely unprofitable contracts. The aid, which must be competitively reviewed and if necessary approved, should therefore not have been given – it did what it was intended to do however, which was to satisfy political intentions.

And what about the Financial Market Stabilisation Act? The law the acceleration and simplification of the acquisition of shares in and risk positions of companies of the financial sector through the financial markets stabilisation fund has a solution ready, and competition law is simply overridden (§ 17):


“The provisions of the first to third parts of the Act against restraints on competition do not apply to the fund.”

This regulation however applies only to the German competition law. European regulations remain unchanged, which means: the Bank aid still requires anti-trust approval of the Commission. The Commission gave these approvals – due to the significant disruption of financial markets (and in particular because of the Euro crisis).

With these regulations, the legislature opens the door to risky, but potentially profitable companies. Quick money and profit, rather than social management and participation. With this regulation the legislature again surrendered democratic achievements. Socialisation was carried out only in the area of the losses, because these are now down to the people. Obviously no one may know of this, certainly not the people or the taxpayer. The Alliance for Democracy however report it, and call on the people: Defend yourselves against these and other obvious political machinations which go beyond any moral decency, and call urgently for the laws to be changed; it is unacceptable that the people who have helped these institutions to profits must now be responsible for their losses, if they use this money for risky speculation, and once again take a fall.
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The IMF
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Year-End Selection of Texts
CDU Party Congress 2016
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Deployment of the Bundeswehr in Germany
Crucial Test with International Implications
Ever Closer?
On the 2016 German State Elections
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Nettlesome Politics
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Legal Action
Clever Shifting Tactics
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Political Paradox
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Elmau
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Texts on the liquidation of the euro
Wasting Time
New Rules, Same Impetus
Call in the Army
Politicians Run from Themselves
Tax Policy Loopholes
Europa without the Euro
Alternative to the Euro
Hellas
Easter 2015
Deflation
Tidying Up
Insolvency Statute
Heiner Geißler
Germany Corrupt No More
India’s GDP growth
PEGIDA
Rescue Fever
Unbridled Power
Heaven on Earth
Getting down to the Nitty Gritty
1-0 in Favour of the Opposition
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Democratic Deficits
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Fit for a Museum
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Clueless Advisors
Pension Debacle
The Balanced Budget Lie
The Wimpy Currency
Acid Test
Two Very Different Issues
Who is Ruling the World?
More Clandestine Employees
The Recession Principle
Is This Really Better?
Kohl and Merkel
Debt Brake Debate
Reforms
Merkel and the democracy
Tax Losses
Totalitarian Collectivism
Regrettable Incident
Wulff’s Attorney Brings New Legal Action
The ECB in the Crossfire
Former Constitutional Judge Sceptical
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Stumbling Match
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The Crow …
Papier‘s Morality
Shot in the Arm for the Economy
Political Crime Novel
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Recommendations in case of a crash
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The election in Saxony
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Immigrants criticised
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Bundesbank closes Money Museum
Lawsuit against bank union
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Cowardly warriors
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Bribery of MP’s
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The Stability Pact
Avoid Obama
Thoughts on Merkel's birthday
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Niebel’s Low Points
On László Andor’s speech
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Minimum Wage II
Minimum wage III
Minimum wages IV
The minimum wage V
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The impossible triangle
The standard pension
Schäuble tricks again
The old “Welt”
The Union wears the trousers
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With full intent
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