In the debate on the proposed merger between Deutsche Boerse AG and NYSE Euronext the Hessian Junge Union – the youth organization of the Christian Democratic Party (CDU) – has announced its support of the merger. It regards the transaction as a major gain for the European financial market and in particular for Frankfurt as Germany’s key financial center.
“Especially when viewed against the background of growing competition from emerging financial centers in Asia, the merger will put Deutsche Börse in a much stronger position to excel in this global competition,” says the economics and finance policy spokesman of the Hessian JU Ulf Homeyer, adding that the merger would be of vital interest for Germany and Frankfurt. Major strategic decisions, business segments and the majority of business would be controlled out of Frankfurt. Also, key governance functions of the joint company would remain in Frankfurt, f.i. the role of the Chairman, Co-CEO and CFO. “Frankfurt will be named in the same breath as “Wall Street” thereby contributing to its establishment as a leading international financial marketplace,” Homeyer is convinced.
Moreover, the merger would create an important and attractive counterweight to alternative trading platforms many of which are operating intransparent and under far fewer regulatory requirements. “Especially in times like these when we can strongly feel the full impact of the economic and financial crisis, the importance of effective and sound regulation becomes blindingly obvious,” Homeyer said. The merged company would promote the transparency, integrity and security of global financial markets and establish itself as a global benchmark for regulation. “At the same time, the merger won’t impact existing local regulatory conditions at all – everything will stay as it is today,” Homeyer says, making no secret of his astonishment about the "horror scenarios" some opponents of the merger have articulated. Those arguing the merger would cost thousands of job cuts following are clearly making use of a dubious argument and engaging in nothing less but scaremongering.
Ultimately, the principal question is whether Germany should in the long term belong to the winners in this global competition with Frankfurt as an attractive location and a prime spot in the international landscape. If the answer is yes then the merger should clearly be supported.
“The merger of Deutsche Börse AG and NYSE Euronext will propel Frankfurt”, Homeyer is convinced.