Deutsche Bank chief Christian Sewing has warned that recession in Germany is inevitable, saying that China was a considerable risk for the nation and that Europe needed big banks to keep up with American competitors.
The CEO of the nation’s largest bank said Germany had become too dependent on Russian energy and would “no longer be able to avert a recession”.
Russia has stopped gas supplies via the Nord Stream 1 pipeline to Germany, raising the prospect of recession and energy rationing in European nations.
Sewing, speaking at a banking conference in Frankfurt, said that Europe had learned a lesson about being “too dependent on individual countries or regions”.
He also said Germany must now face the “awkward question” of dealing with China, citing its “increasing isolation and growing tensions”.
“Reducing this dependency will require a change no less fundamental than decoupling from Russian energy,” Sewing said.
Since the Russian invasion of Ukraine in February, European banks have been thrown into turmoil as they frantically try to cut ties with Russia, imposing an array of stiffer sanctions against Moscow whilst attempting to offset the effects of Kremlin responses in the ongoing economic war.