20,000 blame banks for Krupp raid

The people of the Rust Belt held a beer-sodden picnic under the shimmering towers of Frankfurt's business district yesterday, staging the biggest demonstration since the war against the omnipotence of German banks.

Some 20,000 steel workers had made the 200-mile journey from the Ruhr to protest against the creeping Anglicisation of Rhenish capitalism, and against arbitrary deals struck in sky-scraper boardrooms that eliminate thousands of jobs on the factory floor.

Their anger had been provoked by an un-German takeover bid hatched by the steel company Krupp and Deutsche Bank. Even though the prey, Thyssen, was taking large chunks out of its predator yesterday, the workers' fury was unabated. Tens of thousands had feared becoming unemployed as a result of the takeover, and now thousands employed by the two companies can look forward to redundancy because Krupp and Thyssen are merging "peacefully".

The big banks, which sit on virtually every board, hold shares in almost every company and oil the wheels of the German model of capitalism while taking their hefty cut, emerge from the affair as the chief villains. Keeping foreign competition out of Germany was one thing, but financing one German company's raid on another just did not seem fair play.

The gambit has to some extent paid off, because the two companies are being forced into a shotgun wedding. It is big fish Thyssen that will swallow Krupp, bit by bit. The shares of both companies, though weak yesterday, finished much higher than their values before the takeover battle.

Representatives of both confirmed yesterday that the companies would be forming a steel production joint venture, to be managed by Thyssen, and would explore other forms of co-operation short of a merger. The details of their deal are expected shortly.

It is victory of sorts for Krupp, which had tried in vain to convince Thyssen of just such a fusion for more than 20 years. Indeed Krupp, with a more anaemic balance sheet than its rival, was heading for the wall in any case. Compared with that fate, a merger on just about any terms might seem a triumph.

However, the way the company went about ensuring its survival, and particularly the role played by the banks, outraged politicians and business leaders alike. The hostile takeover bid had brought the lawlessness of the "Wild West" to Germany, or "Casino Capitalism", in the words of Klaus Zwickel, head of the IG Metall trade union.