German government insiders defended the state's bailout of ailing Hypo Real Estate today, during the final stages of a parliamentary inquiry into last year's 100-billion-euro (141-billion-dollar) rescue of the bank from insolvency, according to dpa. Secretary of State for Finance Joerg Asmussen and Jens Weidmann, advisor to German Chancellor Angela Merkel, both told the inquiry there had been no alternative to rescuing the mortgage lender. The top-level government officials appeared before the panel a day before Finance Minister Peer Steinbrueck was due to be questioned by parliamentary opposition members leading the inquiry. Merkel's government had announced its bail-out of HRE, parent of Germany's main issuer of covered bonds, on September 29, two weeks after Lehman Brothers of New York filed for bankruptcy. Asmussen and Weidmann both said no errors had been made ahead of the bail-out, and said there had been no indications that problems at the bank threatened its very existence. The ailing bank has now been nationalized and is being propped up with financial aid to the tune of 102 billion euros, of which 87 billion euros have been supplied by the state. The inquiry, consisting of opposition politicians from the Free Democrats (FDP), Greens and Left Party, contends that the government acted irresponsibly and put taxpayer money to bad use. Asmussen's appearance had been eagerly anticipated, as the opposition considers him to carry the bulk of the blame for a costly state bail-out and had called for his resignation. The German Central Bank, industry supervisors and private banks had all defended Asmussen in front of the parliamentary panel.
