Germany’s bankrupt Hypo Real Estate pays out millions in bonuses

[Hannah Bell]

Hypo Real Estate (HRE), the only bank to be nationalised by the German government in the wake of the 2008 financial crisis, announced last week that it had paid out bonus payments to staff amounting to €25 million ($33 million) in 2009.

The announcement came just 10 days after a declaration by the German finance ministry that it was making an extra €40 billion in the form of guarantees available to the bank in order to avert bankruptcy. This means that the German government—and more fundamentally, the German taxpayer—has now made a total of €150 billion in the form of capital and guarantees available to the bank.

Defending the award of bonuses to 1,400 staff members, the board of HRE maintained that the payments together with regular salary payments did not exceed the princely sum of €500,000 per person. The bank also sought to justify its position by pointing out that the half a million payments were far less than the bonuses regularly paid to leading staff prior to the finance crisis and the collapse of the bank.

http://www.wsws.org/articles/2010/sep2010/hreb-s23.shtml