Does the German government have the choice not to bailout Deutsch Bank?

The German Chancellor, Angela Merkel, ruled out the possibility of a bailout for Deutsche Bank. I think that it may be true for now, but is not realistic in the future. The Chancellor's claim is made based on the political reasons, as there will be an election next year and such claim could help her to win votes; however, such claim is not realistic under the current economic condition.

Previously Deutsche Bank had recovered relatively well from the Brexit crisis, because of people's belief in the central bank, in the German case, the European Central Bank, and more importantly the state. When people believe their deposits are backed by the state and the central bank, they will not be too worried when their banks have some financial struggling. There have been some reports suggesting that Deutsche Bank has a dangerously high leverage ratio and has some financial difficulties. The importance of Deutsche Bank to the German economy is significant, as the bank is the largest lender domestically.

Now it seems Deutsche Bank will not be bailed out when the time comes, then savers and investors will start to panic as they can no longer rely on the state support. This is why we see the stock price of Deutsche Bank slumps since Merkel ruled out bailout for the bank. The firms and individuals who borrow from Deutsche Bank may panic. If Deutsche Bank is forced into the position of filing bankruptcy, the debtors may need to pay back their loans earlier than their scheduled times and a rollover is definitely not an option. Then we are very likely to see more firms in Germany filing bankruptcy as the liquidity issue could become a major problem for the German economy when the biggest domestic lender is in a deep financial difficulty. Then the German government has to step in and bail out Deutsche Bank, as it is no longer a firm's individual problem, it becomes a domestic macroeconomic problem.

Therefore, I think that the German government eventually will be forced to bailout Deutsche Bank, as the bank's problem is very easy to become a national problem.