Guest Post: Open Letter To Chancellor Merkel: Repeal The Financial Aid Laws To Save Germany

Tyler Durden's picture

Submitted by Toni Straka at The Prudent Investor

Open Letter to Chancellor Merkel: Repeal The Financial Aid Laws To Save Germany

Renowned German economist Professor Wilhelm Hankel has written a second open letter to German Federal Chancellor Angela Merkel after his first plea to follow the dictates of reason and not introduce the constutionally disputed financial aid laws that will pump €750 billion into insolvent Eurozone banks while pushing Germany deeper into social and economic abyss was ignored.

Hankel has already warned in 2005 that the Euro system is unsustainable.

While I am still wondering to whom Germany will sell all the goods it
now produces (and warehouses) when all important trade partners face the
same economic and social problems, Hankel focuses on the adverse
effects the hastily pushed through financial aid laws for Greece - which
is already running into difficulties to comply with the austerity
conditions that are part of the bailout - will have on Germany in the
future.

He warns of dire consequences and states that Merkel may run afoul of
the German constitution and her oath to stave off the German sovereign
from bad damage.

Poll: 98% Want a Public Referendum on Eurozone Aid

The letter, supported by such German academic capacities like Wilhelm
Nölling, Karl A. Schachtschneider and Joachim Starbatty has been
co-signed by 7,315 German citizens since August 18. His first letter was
co-signed by 6,128 sovereigns.

A poll on his website
asking whether there should be a public referendum on Eurozone aid
shows that 98% of voters are in favor of a direct democratic decision.

Here is Hankel's letter translated into English.

Honored Federal Chancellor,

unfortunately
you have not answered my first letter dated March 27, 2010. For this
reason I have to repeat my concerns as the problem approaching Germans
and Europeans has become worse meanwhile.

Both
the "Greek Aid Law" from May 7, 2010, as well as the following
"Emergency Umbrella Law" from May 7, 2010, do not only constitute strong
offences against EU law, but also against our own German constitution.

You
know the situation due to the legal action introduced by 5 university
professors at the German constitutional court. Your assistants have
informed you of this as well.

This is a case of
breaking the law in the most severe way. This is even more dangerous
than the economic consequences. Europe is the homeland of states ruled
under the law. The Euro will not regain its former strength but it will
be relegated into a European soft currency.

Those
countries close to a state default, especially the southern, but also
the western Eurozone, will neither get out of debt nor will it change
their past behaviour. After all the money of the rescue fund does not
flow to the states but to their insolvent banks. And the governments of
these countries will not fulfill the conditions coming with the rescue
funds, as doing so would endanger their political and economical
stability.

It is highly implausible when your
finance minister announces austerity packages while allocating 70% of
annual federal tax revenues for rescue packages whose failure is already
written on the wall.

Germany and the few other
still economically stable countries in the Eurozone are sinking money
into a barrel without a bottom. This money, that the German taxpayers
will have to come up with, will be lost for German citizens and their
future. By now you had to acknowledge that our country can neither
fulfill its social obligations, nor satisfy its promises to keep and
create jobs. I am confident you will live to see that this austerity
policy will lead to similar effects as we see them nowadays in Greece:
protesting people, burning cars, shattered windows and maybe still worse
actions. Can you account for this?

I appeal to
you to repeal these laws before the constitutional court will nullify
them. Your oath included "to fend off damage for the German people" -
with this you stand the chance to do so. The emergency umbrella from
Brussels will not save the common currency.

This is my and our public call to the German sovereign and to you. Realize it!

Kind regards

Wilhelm Hankel

For
those who just came out of a coma: Germany is on the verge of burning
thanks to the hubris of a government that seems to be more interested to
keep a disintegrating Eurozone alive than comply with its social
obligations to the sovereign.

As all fiat currencies in the past 3 centuries the Euro is doomed to
failed and there is a growing chance it could fail before year's end.
This is all gonna end really, really bad. TV footage from Greece should
show those at the power levers that policy has to be designed for the
sovereign and not for the rescue of irresponsible bankers.

Unfortunately European politicians still draw a total blank in assessing the current economic situation, blogging Spain based economist Edward Hugh says in this post.

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traderjoe's picture

Just one default, somewhere, anywhere. That's all it will take. A US state, a city, an EU country, state, bank. 

Somewhere, an entity is just going to throw in the towel. That's ALL IT WILL TAKE. And then the dominoes will fall...

anarkst's picture

Defaults happen frequently.  Nobody knows what's going to happen.  When it does, most likely the sun's gonna rise the morning after.

Perseid.Rocks's picture

Yep, default already you bastiges.

desgust's picture

Revolution Europe!

Drop dead damned Euro!

Referendum,Referendum, Referendum, Referendum!

Merkel is a neocon bought by the American oligarchy!

Prof. Hankel is right! We want OUT of this mess! Debt restructuring and OUT!

VK's picture

There is no out of this mess. Sorry. 

There is only collapse. Only from the ashes of the chaos will the world rebuild what it can, where it can. Germany's policies are better than most but we are all hanging by our necks at the whim of the derivatives markets. Just one default and chaos will erupt. It will be a force to behold...

DoChenRollingBearing's picture

I agree, this is going to be very bad.  I do not know when, but it feels like it is going to happen pretty soon.

We are going to see a real Force of Nature descend upon us.  Best get prepared.

desgust's picture

It's all I'm waiting for!

Nuff shit. Only fresh blood will heal the wound and we need to go ahead and clear this dirt.

Hall 9000's picture

 

Germany's Government Deficit Soars By Over 100%

 Aug. 24, 2010 - excerpt

"The Wall Street Journal highlights how bank bailouts were part of the deficit blow-out:

 

Those figures include a stark reminder of the cost of bailing out some of the country's banks after their disastrous losses during the financial crisis: around €900 million of the deficit was due to the assumption of bad debts from Düsseldorf-based WestLB, which are now on the balance sheet of the state-owned bank rescue fund, Soffin.

The deficit is just a reminder that Germany's economic performance may have come at the cost of its government's finance's. It's not that government finances are anywhere near problematic levels, but expect more of this to come especially as Germany is pressured to support Europe is exchange for the benefits its export sector receives form the Eurozone arrangement and a falling euro. Still, it could easily be a good deal for Germany given how well their economy is performing relative to other Eurozone members."

http://www.businessinsider.com/germany-budget-deficit-2010-8#ixzz0xZ6Hd7nc

 

 

 

Rainman's picture

Ms. Merkel : Trinken sie nicht das wasser, die kuhe und die schweine haben in ihm geschissen.

Ms. Merkel : Don't drink the water, the cows and pigs have shit in it.

knukles's picture

And all along I was worried about the fluoride.

deadparrot's picture

Can you blame those European pols. The EU means they get fancy titles and plush offices. No EU means they will have to go back to their dreary boring jobs in some cement office building. I've always thought the EU was nothing more than the collective wet dream of ambitious bureacrats.

desgust's picture

Full of shit bureauc-RATS please!

Put them down before we get a total EU dictatorship!

redpill's picture

Germany's remaining time to batten down the hatches is swiftly running out...

Rainman's picture

Bailout Burnout is going global. Maybe there is hope.....hope for what I don't know.

redpill's picture

There's plenty of hope once we get to the other side, trying to figure out how not to go broke getting there is the trick.

wintermute's picture

The Germans destroyed their currency in 1921, almost within living memory. Doing this twice in 100 years is sooooooo dumb.

The US has not experienced it before - so Obama, Geithner have some excuse of childish innocence for putting the dollar in a handcart to Hell.

The Germans should know better.

Rainman's picture

yes.....Hjalmar Schacht twitches in his grave.

Goldenballs's picture

Obama and Co know exactly what they are doing,but they don,t care,why should they,pension for life on the gravy train,their friends in the Banks and the Oil Industry think they,ll buy all the assets for nothing,this time however it will be different there will be no going back only forwards and they,ll have nowhere to run.

Treeplanter's picture

A lot of Germans and Swiss are asking Granma about the old days.  Then they buy gold.

jmc8888's picture

Sad that they use help for college as the swindle for pumping more into the broke banks.  But not surprising.

But then again, as good as college is or can be, it also isn't anymore.  Too much bs being taught as fact.  Not enough critical thinking.  Teaching for tests.  Teaching imperialism as globalization, and that the future is the British East India Company 1700's model, and that it's unavoidable.  Free trade is good according to them, except it isn't.  Tarrifs are bad, esxcept they aren't.  Pumping out tons of people with degrees that have no skills and can't make money without a ponzi scheme ruling the economy. 

Here's a clue, what's the difference between an Ivy League graduate, and an 8th grade drop out?  They both don't know what the fuck is happening economically, and both missed the first crash, and will miss the next one.

Thus, if you can't think critically, what the fuck good is your degree?  (or the debt you probably incurred getting it)

Sadly, some of the worse, are the most expensive.  I wouldn't touch an ivy league school with someone else's dick.  These are the people that ran the country into the ground, by being idiots.  They're idiots, not the cream of the crop.

I sure and the hell wouldn't send my future children to a piece of shit school that only churns out incomplete individuals, full of nonsensical beliefs.  From Green ideology, to Free trade, it's all bs.

I guess I'm projecting America's colleges onto Germany's, but I doubt there really is that much of a difference.  (we're all monetarists whether we like it or not).  On top of this, the whole green nazi ideology is even more ingrained there.  The whole world fell for the monetarists (who are also behind the whole 'Green' thing).  Not one liberal, conservative, or religious school was spared.  Hell not even West Point.  We're churning out good monetarist officers, our Queen I'm sure is proud.  Green Nazi Monetarism for all through British Imperialism.  (Hint: what country did Hitler get his ideas from...hint...they speak the same language as us here in the United States)

Germany indeed faces a repeat of the social unrest that led to Hitler.  While I won't say what type of leader will follow, as it is uncertain, the crash of the world, including Germany, is for certain.  Even the majority of people that have figured this out though, are still regularly believing bs and/or looking at the wrong metrics.

It's the physical economy stupid. 

Merkel is an idiot, but so is just about everybody that would replace her.  But whatever, things probably crash before this gets implemented anyways. 

 

Goldenballs's picture

So Hitler was Britains fault,what a load of bollocks.Until 1941 this country stood alone against Nazi Germany while American companies made millions selling whatever they could to the Nazi,s, in WW1 1,000,000 men gave their lives from Britain and in WW2 250,000.In WW1 America didn,t arrive on the scene until 1917.After each war only America had it,s industrial base intact to clean up in world markets.If this country had gone in 1940 America would have agreed a peace with the Nazi,s and fallen later.Look at the bollocks America continually drops as supposed world leader,look at the mess the world is currently in,whatever Britains record its paid its price in blood for the rest of Europe,France,Belgium,Italy,Holland,Germany, full of British war cemetries.I don,t give a toss what you think of Britain but don,t compare us to the Nazi,s.

desgust's picture

You are right. You may be worse.

Treeplanter's picture

Don't sweat it GB.  No one pays any attention to people who rattle on like that.  Hit You Tube for a rousing version  of Rule Britannia and you'll feel better.

MacedonianGlory's picture

EU has failed to make true what it promised.

European nations must return to national patriotism. EU is not a patriotic formation.

Globalization failed also. The future it has promised is a havoc after all.

Disolution of federal formations of States is imminent.

StychoKiller's picture

So, you're saying the answer to Rodney King's question is NO!

zaknick's picture

  Burn baby burn!  Drill baby, err NOT!!!

 

 

 

 

 

Dismal Scientist's picture

Time for capital controls ?

Man caught with 55,000 euros in pants at St Pancras  

A man caught entering the UK with 55,000 euros stuffed down his pants has had the cash confiscated because he was unable to account for it.

The 32-year-old German was stopped by the UK Border Agency (UKBA) at London's St Pancras International station after taking a train from Brussels.

Officials found the stash of 500 euro notes - worth about £45,000 - hidden down his trousers.

Criminal activity was suspected so the money was taken. He was not arrested.

The man claimed the money was for business.

But it has been taken off him until he can prove in court it was earned legally.

Peter Avery, of the UKBA's criminal and financial investigation directorate, said: "Officers are working round the clock at all our ports to prevent drugs, weapons and the proceeds of crime from entering or leaving the UK.

"Where we suspect cash may be linked with criminal activity, we have the power to seize it and it will only be handed back if it is later proved to be legitimate."

British banks withdrew 500 euro notes from sale in May after it emerged 90% of UK demand was linked to crime.

Crooks favour the high denomination notes as they make it easier to smuggle high sums.

SimpleSimon's picture

Wait, under the innocent under proven guilty, isn't the onus on the UK authorities to prove that the funds were ill-gotten?  Or does the new normal require the people to prove our innocence just because?

Dismal Scientist's picture

'Welcome to the UK. Now give us all your money.'

It would appear that TPTB have the 'authority' to do exactly that.

Treeplanter's picture

Different rules in totalitarian Europe.  They are popping up here with the war on drugs excuse.

sureseam's picture

Having read the entry paperwork going into the US and it seemed little different.

Large amounts of cash are expected to be declared. 

If caught with undeclared millions, the officials are likely to want to look after it for you until it is clear what is going on.

walküre's picture

A German national going to the UK with that much cash.. maybe he was going to buy physical gold at a discount there? He was probably freaked out to have the cash in a suitcase.

Cash is king until you get caught by her majesty's confiscators.

Gunther's picture

Highly unlikely, there are enough bullion dealers who sell for cash and up to 15,000 Euro even anonymously in Germany.

VM's picture

"we have the power to seize it and it will only be handed back if it is later proved to be legitimate."

Sounds like the highwaymen are back

Dismal Scientist's picture

daylight robbery, bitchez

StychoKiller's picture

U.S. Drug honchos have been doing the same thing for years!

geopol's picture


German Restrukturierungsgesetz for banks

71110

The German government has drawn up a new Bank Reform Law to govern the bankruptcy proceedings of insolvent banks. Under this measure, if a bank of systemic importance fails, the viable commercial banking business is separated out, and the rest of the bank, including proprietary speculation and derivatives, is to be liquidated under something like the US chapter seven procedure. No taxpayer money is to be used for bailouts. Instead, the banks themselves will be taxed to create a special fund, the Sonderfonds für Finanzstabilität or SoFFin, which will be used to pay the funeral expenses of these institutions. It is possible to see in this new law a kind of Glass-Steagal beyond the grave for such banks. With this measure, Germany keeps forward momentum against the speculators.

In the midst of this chaotic situation, European Central Bank boss Trichet has made the foolhardy decision to attempt stress tests on the top hundred or so European banks. What Trichet is planning is an obvious piece of public-relations fakery, similar to the fraudulent stress tests that were supposedly implemented by Tiny Tim Geithner more than a year ago. Geithner’s stress tests were notoriously meaningless because they excluded from consideration precisely those off-balance-sheet derivatives which were the main cause of the banking panic in the first place. We must remember that it was CDOs which brought down Bear Stearns, Lehman Brothers, Merrill Lynch, and Citibank. Credit default swaps made things worse for all of these institutions, and played the leading role in destroying the AIG insurance empire. In spite of this massive evidence, Geithner simply avoided any consideration of derivatives, in conformity with the official party line of both the Bush and the Obama administrations that the ongoing financial panic was a “subprime event,” rather than the world derivatives panic which it actually represented.

At the end of Geithner’s phony stress tests, most of the bankrupt US zombie banks were given a clean bill of health, and this exercise is regarded on Wall Street as one of the indispensable preconditions for the relaunching of the New York stock bubble in March of 2009. A few banks were told to add to their capital reserves, and after that the speculators were off with a bang.

Trichet now imagines that he can carry out a similar crude parlor trick. He may even think that he can extort 100 billion more euros from the capitals of the continent to bolster the reserves of banks that are found wanting — in effect, an expansion of the existing EU bailout of European banks. But Trichet is deluded. Geithner had the luxury of carrying out his fake stress tests at a time when there was no concerted speculative attack on the US banking system, the dollar, and U.S. Treasury securities. Trichet today does not have this advantage. He is trying to conduct his stress tests while the euro, the European banks, and the ECB itself are under sustained speculative attack by the Anglo-American wolf packs. The Financial Times, the London Economist, Forbes, the Wall Street Journal, Bloomberg, CNBC, and other propaganda organs will do everything possible to sabotage the maneuver Trichet is seeking to carry out. US and British hedge funds will be eager to mount new bear raids against European bank shares.

VM's picture

Let go Angela.

Let go the PIIGS before they drown you.

NO more Bail outs

 

Pampalona's picture

The old money in the underpants trick, well now I know why banknotes smell the way they do.

Pampalona's picture

I wonder what they'd find if they searched Merkel's underpants on her next visit...

Coldfire's picture

Dude, two words: nightmare fuel.

Spalding_Smailes's picture

DNA from Nicolas Sarkozy?

He paid a heavy price for that trillion dollar bailout 2 months ago ...

walküre's picture

Ok, so the US economy is an absolute basket case. The Dollar has nothing backing it up. Americans are completely over their ears in debt...

And we're going to bash the Euro because of what exactly?

The Chinese have already said they favor the Euro. Rating agencies are completely irrelevant going forward.

The USD is getting creamed, a gallon of gas will cost $10 by year's end and Americans will default en masse, privately, publicly and corporately.

Goldenballs's picture

Somebody should tell him Central Banks and Markets don,t run on common sense.Imagine all those nice Gold Plated Central European jobs that will go if the EU cracks up.The EU an Untouchable Empire within a Wasteland they,ve created.The writings on the wall ..................... and it ain,t the Iron Curtain that kept all those bankrupt Eastern nations out of reach.

overmedicatedundersexed's picture

have they stopped US bonds moving into EU from Italy..seems they confiscate them ..and let you go. no names, no addresses, no information, you just evaporate..that guy in GB got off lucky if you ask me...no story of" matter" ever gets printed does it??  billions in bonds smuggled is not a story worth reporting ..money is moving across borders in massive amounts may be one thing to glean from the edited "news"

jkruffin's picture

And yet another one of the crooks runs for the hills before the SHTF

FASB chairman Herz retiring Financial Accounting Standards Board Chairman Herz retiring after 8 years
LeBalance's picture

Dear Wilhelm,

I am an agent of the robber barons, you are less than the shit of my dog.

Cordially,

Angela

Sqworl's picture

Shhh save this for next month when the Pigs return from holiday.