The Banker and the Protesters A Meeting of Minds on Germany's 'Occupy' Movement

The "Occupy" movement has garnered support from all parts of the world, including Germany, where protestors have set up camp in front of the European Central Bank in Frankfurt. In an interview, SPIEGEL talks to Axel Fialka and Alexander Sack from the movement, and to Commerzbank CEO Martin Blessing.

The "Occupy" movement began in earnest in New York, where a group of activists formed under the name " Occupy Wall Street" in mid-September to protest against the sheer power of the financial markets. Since then it has grown to become a global movement, with tens of thousands of participants gathering each week for protests, including several thousand in Frankfurt, the center of "Occupy Germany" activities. Occupy supporters in the German financial center have taken over a small park located directly in front of the European Central Bank (ECB).

Around 100 tents have been pitched in front of the banking city's glass-and-steel skyscrapers. "You occupy the money, we occupy the world," one protest sign reads. During the daytime, working groups discuss capitalism, education and culture. During the afternoons and evenings, an "Asamblea" takes place, a gathering held in an outdoor public space during which speaking time is granted to anyone who wants it and democratic decision-making is made at the grass-roots level. The movement is organized via Facebook and Twitter, and an Occupy website provides information for its supporters. So far, those supporters have been overwhelmingly male, and female visitors to the protest camps are relatively scarce. But few could complain about a lack of support. The media is reporting on Occupy, politicians including Chancellor Angela Merkel have expressed their sympathies, and new people interested in what is happening drop by the ECB campsite each day, with some simultaneously raising their own tents.

Each evening, local bakeries deliver leftover rolls and cakes to the camp's mess tent, where warm meals are cooked and served twice each day. The Occupy protesters have made a point of welcoming their neighbors, including homeless people known to drop by. If you're seeking to create a more just society, they argue, you've got to start at home.

Despite all the media and political attention, it still remains unclear precisely what the movement, which is determining its goals through grass-roots democracy, actually stands for. Alexander Sack, a 22-year-old who is training to be an IT systems engineer and recently spent his vacation at the camp, Axel Fialka, a 31-year-old student of cultural anthropology and ethnology and trained retail salesman, and Martin Blessing, the 48-year-old CEO of Commerzbank, a major German bank, sat down with SPIEGEL to debate the aims of the Occupy movement.

SPIEGEL: Mr. Fialka and Mr. Sacks, why did you join the Occupy movement? What motivates you?

Fialka: When I read about the movement on the Internet, it immediately struck a chord with me because I've never been happy with the conditions and the unjust distribution of wealth around the world. I've always asked myself, "How can the world be organized so that as many people as possible are doing well?"

Sack: I've long been interested in what is happening with the financial markets, and I simply don't agree with what's going on.

SPIEGEL: Mr. Blessing, as a banker, how do you view the movement?

Blessing: Of course, I became aware of it through the media when people first started taking to the streets in New York. In Frankfurt, I can look onto the tent city from the Commerzbank tower. A week ago Sunday, I went there myself to see what was going on.

SPIEGEL: What did you see?

Blessing: I saw that there is a great deal of emotional dissatisfaction. But I'm not sure I really understood what the common theme was. I get the impression that the protesters have many different goals.

SPIEGEL: Mr. Fialka and Mr. Sack, who are you protesting against?

Blessing: Or what for? You don't always have to be against everything. You can also be for something.

SPIEGEL: Are you against bankers like Mr. Blessing, against politicians, or against the system, capitalism?

Fialka: It's difficult to answer questions about objectives and demands. There's no point in plucking a fish out of a school and asking where it's swimming. But the entire school agrees that it wants to evade the predator fish and live in a more friendly environment. Many people are extremely dissatisfied with banks that get huge cash injections so they can keep on doing what they've always done, only this time with taxpayers' money, and with our politicians, who aren't prepared to change anything, and with Mr. Ackermann ...

SPIEGEL: ... the chairman of Deutsche Bank ...

Fialka: ... and other advisers from the banking sector, which basically drafts legislation itself.

Sack: Many of us say that the system can't remain the way it is. I believe there is a good chance that far-reaching reforms can achieve the necessary changes without us having to throw the entire system out the window. But it is very hard to formulate such demands for the entire movement.

Blessing: When I visited the camp, I saw four main groups: The first -- which you embody -- is very idealistic, and I mean that in a positive way. They want to change the world. The second group is more interested in staging a cool event. The third would like to disseminate its own agenda with this movement. The fourth is a group of people more my age group, who have brought with them their issues from the environmental movement of 25 years ago.

SPIEGEL: But all of these groups were brought together by unease with financial capitalism, which has led the world into the most serious crisis since World War II. Don't you have the feeling that something is going fundamentally wrong?

Blessing: We have a few fundamental problems, for instance, the fact that Western countries have taken on far too much debt. The level of indebtedness of countries, of banks, of companies and of private individuals has continued to rise in comparison to gross domestic product. Everyone has contributed to this. That means we've bought part of our current prosperity on credit. And we can't continue like that any longer.

Fialka: In my view, this is all a systemic crisis that is only marginally related to the financial markets. In the end, it's always the people who repay the debts. Interest that companies pay is tacked onto their prices, while the interest that countries pay is tacked onto their taxes. Both our politicians and the private sector pass everything on to the citizens, and this is what is driving people out into the streets.

Blessing: But the state does do something with the money it takes in. For example, it builds roads and pays for social services -- that benefits at least part of the population. The question is whether some of the money that the state is now handing out goes to those who will have to pay back the debts in the future.

Fialka: The main problem for me is not that the state is spending too much, but that it has too little income because the taxes on capital income are too low. These were already cut drastically by the previous center-left "red-green" coalition (comprising the Social Democrats and the Green Party, which jointly governed Germany between 1998 and 2005), and are now losing the state tens of billions in revenues every year. The state is about €2.5 trillion ($3.4 trillion) in debt although we have privately held wealth worth almost €5 trillion. So the money's there, and you could simply siphon it off those who were given tax breaks by the government in recent years.

Blessing: It's true that we have an uneven distribution of wealth here in Germany, although it's far less uneven than in the United States, for example. If the inequality is too great, it is up to the government to step in and correct it through taxes.

SPIEGEL: Is this distribution of wealth the result of financial capitalism, which constantly invents new financial products that can make more and more money, thereby making the rich even richer?

Blessing: I think it's more the case that the uneven distribution of wealth in the US is the result of the tax rates. Capital income is taxed at an extremely low rate in the US. The compound interest effect also leads to wealth growing more rapidly. And at the same time we have the problem -- especially in the States -- that real wages are falling.

Fialka: I see the inflated financial markets as the logical consequence of capital that accumulates and no longer circulates. Falling real wage levels have also led to shrinking domestic demand in Germany over the last 10 years. That's also why investing in the real economy doesn't appear to be very lucrative. People are therefore looking for other ways to invest their equity. One consequence of this is that investors are speculating in foodstuffs, loan derivatives and other dubious financial products that no longer have anything to do with the real economy.

Blessing: It's true that there's far too much liquidity overall at present and therefore lots of investment capital. We have to see how we can gradually decrease the market's liquidity again. Secondly, there are products on the financial market that make you ask, "Is this really necessary?" And there are products that make sense, but which -- just like medicines -- depend on the dosage.

SPIEGEL: For instance?

Blessing: Take credit default swaps. A CDS is simply insurance against an inability by creditors to repay their loans. It's like with homes: If you buy a house, you make sure you insure it against fire. But of course you can't insure it twice so you get paid double if your house burns down. If you could, people would have an incentive to set their own homes on fire. And what one certainly can't do is insure one's neighbor's house because one might be tempted to set fire to it.

SPIEGEL: You're describing the reality of the financial markets.

Blessing: This is why you have to consider whether the CDS market should be organized like an insurance market. In other words, I can only insure what I have. There really is a need for action in this area.

SPIEGEL: Where else?

Blessing: We have to put strict regulations in place to get rid of the excesses in our system, which undoubtedly exist. First, securitizing trade activity with more capital leads to less trading. Secondly, derivatives should be processed through clearing houses. That creates transparency. We must also prevent business that is currently regulated from moving off into unregulated areas, the so-called "shadow banking system."


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verbatim128 11/04/2011
1. Well Done, Spiegel!
A good example to follow: It's time to evaluate the Occupy movement and what it stands for, rather than deride and shrug it off. Whether the movement is more than just about protesting inequality and lack of opportunity for the middle class, or simply stuck there for the moment, we all know that our society is in trouble. This trouble will not go away simply by making Occupy demands known, actually governments ought to be hard at work right now to anticipate those demands. That is because soon enough it will be evident that, clear demands or not, the movement seeks a change in the manner in which power is exercised in our democracy. In other words they will demand a share of that power. What the rest of us, the 99% or whatever, may want to know is how do they propose to use that power.
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