Germany considered Wirecard bailout before it collapsed

Regulator and finance minister’s efficacy in question over Berlin ‘business diplomacy’

Germany considered bailing out Wirecard just days before it collapsed last year with a multibillion hole in its balance sheet.

The revelations raise fresh, uncomfortable questions about the efficacy of the country’s regulator and the role of finance minister Olaf Scholz, as the Social Democrat (SPD) steps up his efforts to become Germany’s next chancellor.

Hours after Wirecard revealed on June 22nd last that €1.9 billion on its balance sheet probably did “not exist”, Mr Scholz’s deputy Jörg Kukies suggested a plan to bail it out with funds from a state-owned bank.

“A bank run could put Wirecard in liquidity difficulties,” write ministry officials, according to documents seen by Reuters and Der Spiegel magazine, adding it was unlikely the company’s creditors would “feed it to the wolves”.


Berlin’s finance ministry, which has previously said Wirecard received no special treatment, said the company enjoyed the “usual framework of our business diplomacy”.

Digital success

Six months to Germany’s federal elections, as a parliamentary inquiry steps up its probe, Mr Scholz has yet to explain what he knew about a company once seen as Germany’s greatest digital success story.

Leaked documents suggest Mr Kukies, a former staff member of Goldman Sachs, asked staff whether there was a case for Wirecard to receive a bailout.

A staff member told Mr Kukies that Mr Scholz would receive an “initial assessment”, marked “very urgent” and “confidential”, highlighting the company’s importance in processing payments for leading German retailers.

According to Reuters and Der Spiegel, the memo suggested the bank was sound and unlikely to prove a bad investment.

“The press reports that Wirecard’s operating business is doing well despite the coronavirus crisis and despite the missteps,” the memo continues.

‘Risk standpoint’

On June 23rd, Mr Kukies asked to speak with the head of Ipex, a subsidiary of Germany’s state-owned KfW bank. According to one financial ministry official, the subject of the call was to “find a German solution to Wirecard”.

Two hours later, after their phone call, Ipex chief executive Klaus Michalak wrote to his KfW superiors that such a deal for his bank was “not justifiable from a risk standpoint”.

Days later Berlin dropped the idea of a bailout as questions about Wirecard’s business practices grew and the company collapsed.

Even so, it will harden suspicions of German opposition politicians that the federal finance ministry was prepared to risk taxpayers’ money despite having no idea what was going on at the Munich-based company.

Derek Scally

Derek Scally

Derek Scally is an Irish Times journalist based in Berlin