German opposition will tackle Merkel on banks

The head of Germany's main opposition party said Sunday that his party would attack Chancellor Angela Merkel in the run-up to next year's general election on a failure to rein in the banking sector. A year ahead of the poll, the leader of the centre-left Social Democrats (SPD), Sigmar Gabriel, said financial institutions were out of control and required tighter regulation. "The 2013 election must be a referendum on taming the banking and financial sector," Gabriel said in a position paper published on the party's website and repeated in a Sunday newspaper interview. He accused banks of "blackmailing" governments by demanding multi-billion-euro (dollar) bailouts for "damage that they created", with the threat of dragging economies down with them if they are not rescued at taxpayers' expense. "Instead of working toward effective, tough and uncompromising regulation and taming of the financial sector, the German chancellor bows to the pressure and calls for 'democracies that conform to markets'," he said. Gabriel said top German banks were guilty of aiding and abetting tax evasion, most recently in high-profile cases of wealthy Germans hiding money from authorities in Swiss accounts. And he attacked what he called "indecent salaries" for top bankers and called for a ceiling on tax write-offs for pay to management. The head of Merkel's parliamentary group, Volker Kauder, dismissed Gabriel's broadsides as "populism" and said the party rolled back regulation of the banking sector while in power with the Green party from 1998 to 2005. Gabriel is seen as one of three potential candidates the Social Democrats will field at the election in September or October 2013 against Merkel, who has led Germany since 2005. The party has said it will name its candidate early next year. Polls show it trailing Merkel's conservative bloc by about six percentage points. A majority of Germans (52 percent) said in a poll for public broadcaster ARD published Friday that they opposed an aid package for stricken Spanish banks of up to 100 billion euros ($122 billion) approved by eurozone finance ministers.