Thursday , 27 October 2016
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U.S., Europe Fray Nerves with Company Crackdowns

The U.S. is looking for multibillion dollar penalties from Germany’s biggest bank and its biggest carmaker. The European Union is demanding similarly large sums from America’s most valuable tech company, Apple.

Both sides of the Atlantic appear to have become emboldened to crack down on big companies that are found to have misbehaved. Some analysts say it’s a sign that governments, several of which have elections looming, are feeling political pressure to act against corporate wrongdoers.

But the crisscrossing crackdowns have also frayed nerves, especially in Germany, and led to dark talk about a tit-for-tat war in which the U.S. and EU target each other’s companies to gain trade advantage.

In particular, the penalty of as much as $14 billion hanging over Deutsche Bank, Germany’s only bank of global significance, has put the German political and business elite on edge.

“What we are going through are moves that are similar to a trade war,” said Peter Ramsauer, the chair of the German parliament’s economy committee.

“In the U.S. there is a long tradition of using every occasion for conflict similar to a trade war, when it serves their own economic interests,” Ramsauer was quoted as saying by the Die Welt newspaper. “Connected with that are the extortionate demands for compensation, as we see in the Deutsche Bank case.”

Deutsche Bank is among a group of banks that the U.S. government says sold dodgy mortgage-based bonds that helped trigger the 2007-8 financial crisis. But there are concerns that if the penalty is too big, the bank may have to raise new capital from investors or even need a government bailout. Chancellor Angela Merkel may be reluctant to approve such aid, which would also be a severe political embarrassment ahead of 2017 national elections.

News of the potential fine on the bank followed by days a decision by the…