German parliament suspended its budget debate and convened in a special session Wednesday in response to the terrorist attacks in New York and Washington, and the Chancellor reacted with strong words of condemnation.
German Chancellor Gerhard Schroeder did not mince words in his reaction. He described the attacks on the World Trade Center as a declaration of war on the entire civilized world and promised unlimited solidarity with the United States in its battle with terror.
In Parliament, too, the effects were felt immediately. The four-day annual budget debate, which began Tuesday, was cut off and postponed - not only to allow ministers to conduct more urgent national security business, but because it was immediately clear that the German economy will be affected.
Like many other countries, Germany ordered flags to be flown at half-staff and observed five minutes of silence Wednesday to honor the dead. Even factories, like the huge Volkswagen auto-plant at Wolfsburg, stopped production lines for a while to observe a moment's mourning.
The Chancellor told a special parliamentary session, which was attended by U.S. Ambassador to Germany Dan Coats, that Germany would not let the values of peace and freedom be destroyed in Europe, America or anywhere in the world.
Meanwhile, German companies tried to assess what might have happened to their New York staff. Deutsche Bank said its 300 plus staff had been evacuated from the World Trade Center, but it could not be sure what had happened to them afterwards, while Commerzbank corrected earlier reports that it had staff in the building. Its offices are in the World Financial Center instead.
The German financial markets, like London's, decided to continue trading Wednesday, although the Frankfurt stock exchange was forced to close 45 minutes early Tuesday after a bomb scare, and it remained closed to process the massive turnover in stocks following the disaster. However, the Frankfurt electronic exchange, Xetra, said it had postponed the opening of a new U.S. segment scheduled for Friday.
Tuesday saw massive selling of insurance and reinsurance companies, which expect to face huge payouts as a result of the attacks, and oil companies stocks rose. Munich Re - the world's largest reinsurer, saw nearly 16 percent, or $6.3 billion, wiped off its stock market value. Swiss Re, its Zurich-based rival, lost almost $5 billion in market capitalization.
Yet, losses like those would assume damage claims of about $60 billion. Munich Re and Swiss Re were quick to assure investors they expected much lower claims from Tuesday's attacks. The German company said the claim would be big but not enough to affect its financial stability. Swiss Re spoke of a likely exposure of $1.2 billion - no bigger than it faced after the terrible storms which hit Europe in 1998 - and well below the $20 billion insurers paid out after Hurricane Andrew hit the United States in 1992.
And on Wednesday, following the lead of the U.S. Federal Reserve, both the European Central Bank and the National Bank of Switzerland, which is outside the Euro Zone, promised generous injections of short-term funds to support the money markets.