Germany's Scholz: Something drastic needs to be done at Commerzbank

BERLIN: German Finance Minister Olaf Scholz on Tuesday cautiously backed efforts to restructure and reduce costs at Commerzbank after its new CEO told staff in a memo there was no way of avoiding significant job cuts at Germany's No. 2 lender.

The government holds a stake of more than 15 percent in Commerzbank following a bailout during the financial crisis and the plan to cut up to 10,000 jobs could complicate the election campaign of Scholz and his Social Democrats later this year.

Stefan Wittmann, who sits on Commerzbank's supervisory board as a labour representative, said last week that the scale of the discussed job cuts was "simply crazy".

Scholz told reporters in Berlin that he was observing the situation at Commerzbank, adding that he welcomed a joint effort by management and the works council to find a good solution for the future of the bank.

"I think that is also the right way so that everyone knows that something has to be done, even something very drastic - but of course it has to be done within the framework of social partnership and that is how it seems to be taking place now," Scholz added.

Scholz is running as the Social Democrat candidate for chancellor at federal elections in September, when conservative leader Angela Merkel will end her fourth and final term in office.

SPD lawmaker Cansel Kiziltepe sharply criticised the proposed job cuts.

"Shedding 10,000 jobs is not a restructuring strategy. It's a brutal austerity course at the expense of the employees," said Kiziltepe, who is a member of the financial committee in the lower house of parliament.

The Commerzbank supervisory board will discuss the job cuts and the management's broader overhaul strategy at a meeting on Wednesday.