City: Mighty fall

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The Independent Online
IT'S hard to imagine a more irritating - and ridiculous - international demand than that advanced by the German Finance Minister, Theo Waigel, at the IMF meeting in Washington last week. He argued that German companies seeking a US listing for their shares shouldn't have to conform with US accounting practices, since US companies that list in Germany are allowed to do so unconditionally.

The reason this apparently esoteric subject has become an issue is because Daimler-Benz, one of Germany's leading manufacturing companies, recently admitted that the small profit it reported in Germany last year is transformed into a thumping great loss under US accounting practices. The same, it appears, would be true for a great mass of German companies if, like Daimler- Benz, they were to seek a US listing.

I'm told that it is well known among the cognoscenti of international accounting practices that German companies are able to flatter their figures in bad times by pulling back provisions made in good times, but to most of us the Daimler-Benz diclosure came as a revelation.

Rightly or wrongly, what it said to the world was that Germany - upheld as the great shining example of high- quality, super-efficient manufacturing industry - isn't in truth much better than the rest of us. Certainly, its ability to weather recession without chalking up the sort of trading losses recorded almost everywhere else in the world is exposed as a charade.

In this context, Mr Waigel's demand seemed like German arrogance in the extreme - like saying that BMWs should be allowed to drive on the right because that's the way it's done in Germany. Thankfully, the New York Stock Exchange and the Securities and Exchange Commission are treating Mr Waigel's suggestion with the contempt it deserves. He's not giving up, however. Mr Waigel is planning to lobby the US Treasury Secretary, Lloyd Bentsen, for recognition of Germany's archaic methods.

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