The bankruptcy of the Greensill-Bank could mean the total loss of the investments of many German municipalities.
Four municipalities in Upper Bavaria are also affected.
For four Upper Bavarian municipalities, the bankruptcy of the Greensill Bank could be very tough.
While the funds of private investors in the amount of up to 100,000 euros are protected by the deposit guarantee, for Vaterstetten, Pöcking, Puchheim and Denkendorf, investments in the millions are on fire.
Like many other municipalities, they have invested free funds in the bank because of attractive interest rates.
A total of around 50 municipalities in Germany are said to be affected by the Greensill bankruptcy.
For many, things could get worse.
Monheim in North Rhine-Westphalia has invested 38 million euros in Greensill.
For the two Hessian communities Eschborn and Wiesbaden, it is 35 and 20 million euros, respectively.
The state of Thuringia is even involved with 50 million euros.
Expert criticizes communities for investing in Greensill
Experts are chalking the communities for investing free taxpayers' money with Greensill.
"They entrusted their residents 'money to a bank due to a few per thousand higher interest rates, which has been accompanied by critical reporting for some time," says Michael Peters from the citizens' movement Finanzwende in the Handelsblatt.
"The chamberlains must now accept their responsibility."
Municipalities affected by Greensill bankruptcy are joining forces
The affected municipalities defend themselves against the criticism.
Monheim states in a press release on March 16 that Greensill had a good rating right up to the end.
The investigations by the Federal Financial Supervisory Authority (Bafin), which had apparently been running against Greensill for months, were unknown to the financial officers until it was too late.
Now the damage should be limited as much as possible.
A total of 26 municipalities, which have invested a total of 255 million euros in Greensill, have come together and agreed on a joint legal procedure, the press release said.
This also includes Vaterstetten, Puchheim and Pöcking.
The aim is to get back at least parts of the assets from an existing bankruptcy estate.
Liability claims are also examined jointly.
Greensill: Institutional investors and local authorities have invested 500 million euros
The Greensill bankruptcy is the second major financial scandal in Germany after the Wirecard bankruptcy.
Bremer Bank had to close its customer transactions on March 3, 2021 on instructions from BaFin.
The Bremen District Court opened insolvency proceedings against the bank on March 16 at the request of the Bafin supervisory authority.
Private investors have put an estimated three billion euros in Greensill.
In the case of institutional investors and local authorities, it was around 500 million euros.