July 1 (Bloomberg) -- German Deputy Finance Minister Joerg Asmussen should be fired for failing to adequately prepare for a rescue meeting last year on Hypo Real Estate Holding AG’s liquidity crisis, opposition members of parliament said.

Asmussen didn’t have his own independent information on Hypo when he went into the Sept. 29 meeting which led to the first 35 billion-euro ($49 billion) rescue package for the lender, lawmakers from the opposition Free Democratic Party, Green Party and Left Party said. Finance Minister Peer Steinbrueck, a Social Democrat, must sack his deputy, they said.

“Asmussen practically stumbled into the meeting which was completely steered by Deutsche Bank AG’s chief, Josef Ackermann,” Volker Wissing, the Free Democratic member of a committee investigating the Hypo bailout, told reporters in Berlin today. “Someone who represents the interests of taxpayers should have been diligently prepared.”

Munich-based Hypo almost collapsed in September when its Depfa unit failed to get short-term funding. Hypo has since received 102 billion euros in debt guarantees and credit lines. A parliamentary committee, set up at the request of the three opposition parties, is examining whether Chancellor Angela Merkel’s Christian Democrat-led coalition with the Social Democrats could have done more to prevent the bailout.

Lehman Bankruptcy

As a result of the alleged lack of preparation, the government had no other option than to accept the bailout instead of shifting more responsibilities to other private banks, Wissing said. After Lehman Brothers Holdings Inc.’s bankruptcy filing on Sept. 15, the government should have set up a crisis team, he said.

“This is an outrageous and desperate effort by the opposition to get media attention,” said Nina Hauer, the Social Democratic committee member. “We’ve all heard the witnesses saying that there were no warning signs that would have required a different course of action.”

Germany’s financial regulator BaFin and the Bundesbank, which share responsibility for banking supervision, attended the negotiations with teams of lawyers and specialists and informed the ministry continuously, said Hauer. Asmussen stepped in when it was clear that Hypo couldn’t be saved without government help, she said.

‘Beyond Doubt’

Steinbrueck backs Asmussen “unreservedly, his reputation and capabilities are beyond doubt,” Martin Schmuck, Steinbrueck’s spokesman, told a regular government press briefing. The opposition is waging a “campaign” against the deputy, Schmuck said.

Merkel’s spokesman Ulrich Wilhelm said the Chancellery is working “smoothly” with Asmussen, whom he described as a “hard-working and very diligent” official.

Axel Troost, the Left Party’s representative on the investigative committee, said the government didn’t prepare any alternative scenarios during the course of 2008, when it was already alerted to the troubles at Hypo and other lenders.

The “leadership” at the Finance Ministry “only took notice in October of the results of the special probe by banking regulators into Hypo,” said Troost.

Gerhard Schick, the Green Party’s representative, shared Troost’s assessment of the ministry’s handling of the Hypo matter. “Someone who bungles with 35 billion euros shouldn’t be allowed to handle a rescue fund of 400 billion euros,” he said, referring to Germany’s bank-rescue fund.

To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net

Last Updated: July 1, 2009 08:39 EDT