THE European Union's economic woes will finally hit German taxpayers' pockets with one of the country's biggest banks set to introduce fees for basic services.
The eurozone crisis is hitting Germans in their pockets for the first time
Commerzbank are planning to charge ordinary people for every day transactions as
it struggles to cope with the ruinous impact of Brussels' financial policies. Industry chiefs said they expect other institutions to follow their lead shortly, raising the spectre of
tens of millions of Germans being forced to dip into their own pockets to pay for the EU's failures. The stricken bank, whose shares plunged to record lows today, said it had been severely weakened by the European Central Bank (ECB) setting negative interest rates.
It had already performed poorly in a stress test of Eurozone financial institutions last week alongside compatriot Deutsche Bank, raising fears about the strength of the German economy post-Brexit.
With
anti-EU sentiment on the rise in Germany and the growth of the far-right Alternative for Germany (AFD) party, the very real impact banking fees will have on average families will provide a major headache for Angela Merkel.
The German leader is already under huge pressure over her refusal to budge on her controversial open door immigration policy, and will have to face voters in a General Election next year.
Customers of Commerzbank - Germany's second largest bank - in future will have to pay higher fees for credit cards and making deposits.
They will also be charged for over-the-counter transfers in branches, according to respected German newspaper Die Welt.
It says other lenders like Germany's biggest, Deutsche Bank, could soon follow suit
Special conditions on loans will be scrapped and minimum interest rates will be introduced for variable loans - a move which is likely to hit small and medium sized businesses directly in the pocket.
It has also
scrapped its ambition to match its 2015 profit of a billion euros, citing the "low interest rate environment" and "geopolitical uncertainties" - the latter of which may be a reference to Brexit.
And CEO Stephan Engels insisted that other institutions will soon be forced to follow its lead due to the post-Brexit economic crisis in the eurozone, even though German newspaper Die Welt warned that such a move would leave customers "on the losing side".
Commerzbank has lost more than 35 per cent of its value since May whilst shares in Deutsche Bank - the country's biggest financial institution - have plunged by 60 per cent in the same period.
They have been dragged down in part by the shocking state of the banking sector across the Eurozone as a whole, with Italian banks in particular struggling to keep their heads above water.
Their malaise is also due to the negative interest rates being set by the ECB in a desperate bid to prop up the failing Eurozone and stimulate growth in depressed Mediterranean economies.
Since 2014,
banks have had to pay additional penalty interest to deposit cash with the ECB which is costing Commerzbank a whopping 100 million euros a year in missed interest income.
Ingo Frommen, an analyst at German finance experts LBBW, said: “Commerzbank has two issues. Concerns about its capital are big. In the European Banking Authority (EBA) simulation Commerzbank showed one of the lowest readings, and that was based on the higher capital ratio of end-2015.
“Separately, there is a vastly more sober view about the future development in the low interest rate environment, which is causing a 100 million euro annual hit on Commerzbank.”
The bad news will provide major cause for concern for Mrs Merkel as she gears up for an election campaign and fraught negotiations with Britain over the country's exit from the EU.
It is likely to pile yet more pressure on the German leader to brush aside antagonistic Brussels bureaucrats like Jean-Claude Juncker and seek a sensible compromise free trade deal with the UK.
German industry is already clamouring for tariff-free access to Britain - by far its biggest European market - with hundreds of thousands of jobs in the car manufacturing sector hingeing on the deal struck during the Brexit negotiations.
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