With the term Germany AG is described in the time the network from native financial sources, banks and industrial trusts, grown in particular after the Second World War in Germany.

One also generally understands by this the structure of the German economy; in easily mode of expression as "Rheini capitalism "designates.

History that Germany AG

The typically German economic structure, which with the term Germany AG is often described, finds its origin in the seventies 19. Century. At present the emergence of the German Reich corporations were an important procurement of capital instrument of the rapidly expanding industry. It came to a very strong Vermehrung of corporations. But already 1873 ensured a large collapse of the stock market for the fact that the shares came into disrepute; finally took over then the banks the financing of the industry. By means of granting of credit and participation the financial establishments received view of nearly all ranges of the economy and exerted already influence dominating little later. At this time developed to universal bank system existing today. Both Deutsche Bank and the Dresdens bank were created at that time. This economic system survived the Weimar Republic, the national socialism and likewise the two world wars. After 1945 it formed the basis for the economic recovery.

In order the internal peace of postwar West Germany upright too receive and economic concentration of power to limit, received trade unions participation possibilities. Shareholding or property represented besides instruments, which made it for state, countries and municipalities possible, direct influence on the level of employment to take and the basic supply within different ranges such as energy to place transport and telecommunications for far parts of the population surely. The close entwinement between politics, banks and enterprises formed the foundation of the social free-market economy. In this sense the economic system was committed to also social interests. Efficient industries such as chemistry, automobile and mechanical engineering coined/shaped the picture in Germany. Hostile takeovers were almost impossible due to the small strewing possession of shares, political control and the large influence of the financial establishments (in particular Deutsche Bank and Allianz).

Financial establishments controlled the supervisory boards and develop by over cross participation a close network of mutual relations. Personal acquaintances and arrangements became a higher meaning assign than that market prices of an enterprise. Germans and Dresden bank applied together with the alliance insurance as secret "regents of the economy ". The banks and insurance provided for relative stability, by not permitting those allegedly "ruinous competition" and partitioning the system outward.

The inclusion of the trade unions into the contributing supervisory boards brought additionally peace into the economic system. A real participation in the sense of a democratic influencing control of the staffs was never present, however the constant information flow between work councils, trade unions, enterprises and banks ensured for the fact that social centers of conflict could be recognized and defused in time. Within some strategic ranges like the energy (among other things also with political support) global Player able companies were thus developed.

The mutual participation

Germany AG could with its principal and over cross entwinements is enough time as holding together block uniformly against outside dangers to proceed. Thus enterprises protected themselves mutually against the possibility to be hostilely taken over. In particular the house banks, which share owner, enterprise custodian and credit giver were frequent at the same time, did not permit hostile takeovers. A intransparentes balance right represented an additional aggravation concerning the of the enterprises from the outside. Restrictions of right to vote offered a protection before the fact that share owners could attain more than five per cent of the voices on general meetings. One called the firm entwinements therefore long time also "fortress of Germany", with which attacks were from the outside useless. Altogether today still approximately 40% of the market capitalization of German quoted societies are in the participation possession of German large concerns (conditions 2004). As the further substantial element that Germany AG numerous over cross entwinements as well as mutual participation of the financial companies are added among themselves.

Financial participation and influencing control

At many German corporations into the 1970er years restrictions of right to vote were introduced, in order to prevent the increasing influence of large shareholders from oil supplier countries. Interdependences of the industrie and financial companies among themselves as well as the dependence of the industrial trusts on the financial establishments are not strengthened only by the personnel entwinements. Also the fact that financial establishments are at the same time house and depot banks those enterprises, at which their participation it exists, put out a mutual subordinate position. In particular the depot being correct rights made a strong influencing control of the financial establishments possible.

A case, which provided internationally for attention, was the aggravation of the maximum right to vote with the tire manufacturer Continental, which used these as defense strategy against the assumption of the Italian tire manufacturer Pirelli. Pirelli tried to go around that regulation, by dividing a block of Continental shares into several small packages. However the argument persisted around the maximum right to vote also by judicial procedures, which contributed finally also to the fact that Pirelli the liquid means went out. When the Continental AG was attacked by the Pirelli company, German enterprises stood for the tire manufacturer helpfully to the side. Thus bought up Deutsche Bank, the alliance, the north German Landesbank, Daimler Benz, BMW and VOLKSWAGEN nearly 25 per cent of the Continental shares and held thereby a check minority. In Italy this led thereupon to inside in the parliament to violent reactions. Economic nationalism was accused to German enterprises. Which happens further in many countries of the earth this very day and, if moderately, when positively applies.

Executive committees and supervisory boards

Also by the control organs of the DAX noting enterprises the companies are closely connected. While the dismantling of the mutual ownership structure precedes Germany AG engaged in that, the decartelization of personnel relations progresses against it only slowly. Many investors see the continuation of these informal networks particularly critical from the foreign country. The many cross connections between executive committees and supervisory boards did not create an optimal management control in the sense of the shareholders according to critic opinions.

An BCG analysis of the network density of the 15 at the strongest interlaced DAX-30-Unternehmen resulted in that the entwinement density of the supervisory boards and executive committees increases even easily. 1995 amounted to it 1.28, i.e. each enterprise of the network was connected with every different one on average by more than one person. The density sank 2001 up to 1,04 and rose 2004 on 1,06.

In many German enterprises the enterprise bosses confess themselves mutually too that they change nearly automatically to end of their active career on the supervisory board presidency. In other countries in more than half of the 30 DAX companies usual practice is forbidden.

Articles in category "Germany AG"

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