In light of the Brexit vote, Uwe Fröhlich, President of the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) [National Association of German Cooperative Banks], is calling on the institutions of the European Union (EU) to not rush into handing over too many powers to Brussels. Proposals to restructure the EU's legislative framework by expanding the European Commission to create a European government would not solve the underlying problems. According to Fröhlich, this would only increase tension between member states. "European politicians must take citizens' concerns seriously and strive for greater subsidiarity in Europe," he says. "By not going ahead with the European Commission's proposal for a mutualized deposit insurance scheme (EDIS), European politicians would be able to send a clear signal and strengthen the accountability of the individual member states." However, he believes that closer collaboration is advisable in other areas, such as foreign policy, the fight against terrorism, and immigration policy.
Barely any negative impact on the economic outlook as a result of Brexit
Although the economy will not remain unscathed by Brexit, the BVR is confident that the upturn in Germany is well entrenched. The BVR has lowered its 2017 growth forecast for Germany by 0.25 percentage points to 1.25 percent.
Last year, the Cooperative Financial Network benefited from its stable financial position. Consolidated net profit after taxes came to €7.0 billion, which was between the excellent figure reported in 2014 of €7.8 billion and what had also been a good level of profit in 2013 of €6.9 billion. The Cooperative Financial Network's consolidated total assets increased by 2.4 percent to €1,163 billion. On the assets side of the balance sheet, customer lending advanced by 4.5 percent to €701 billion. In 2015 again, the rise was primarily attributable to the local cooperative banks, which achieved a gain of 4.7 percent. This growth, which was split almost evenly between corporate customers and retail customers, was higher than in the previous year. Long-term home finance was the growth driver in the retail customer business. On the equity and liabilities side of the balance sheet, customer deposits increased by 3.6 percent to €739 billion as at December 31, 2015. The sharpest rise, of 11 percent, was registered for short-term sight deposits at the local cooperative banks, which hold more than 80 percent of customer deposits. As had been the case in the previous year, income taxes amounted to €2.8 billion in 2015. However, current income taxes were up by €0.2 billion to €2.7 billion.