Those banana-hugging Germans strike back, and by doing so, throw the rotten apple of the imminent Greek collapse straight into America's back yard: in today's edition of Handelsblatt, German politicians have said that only the International Monetary Fund is the right institution to save Greece from going bankrupt. While the increasingly irrelevant Greek rumor-spreader has been very busy over the past few days, getting Greek newspaper Ta Nea to announce that now Caisse des Depots has entered the KfW bailout syndicate, in an interview with German TV station ARD, Merkel said that not only is this yet more gibberish but that there is no legal basis for any of the rumored actions. So what will happen to Greece? Well, if former ECB Chief economist Otmar Issing has his way, Greece's dirty laundry will end up being washed by American taxpayers, because you see Greece is just as much a member of the IMF as it is of the EU, or so the Germans claim.
Rough google translation from Handelsblatt:
chief economist Otmar Issing provides a similar view: "My preference is
that you turn on the IMF, since Greece is a member of the IMF, not the
European Union", said the current chairman of the Intergovernmental
Commission for the financial architecture for information in this
newspaper recently the Europe Committee of the Bundestag. The monetary
union was not a state, Issing argued, but a community of sovereign
states. If you could help Greece, other countries refuse to help
little, "he said.
Not all that shocking, a Greek default (but, but, it is only 0.00001% of world GDP or whatever), it is now confirmed, would be the next Lehman:
A bankrupt government would meet not only the euro zone, but shaking the entire global financial system. After
the video of Obama, Merkel and Brown said the spokesman for the U.S.
president, Robert Gibbs, Obama was convinced that the EU would respond
"appropriately and effectively" to the crisis. On the foreign exchange markets, the continuing uncertainty sparked a new wave of speculation against the euro. According to the U.S. inspection CFTC, the number reached bets on a falling euro share price, a new record. This year, the euro against the dollar has lost about ten percent of its value.
The biggest hindrance to a Greek bailout: Germany itself, whose political parties realize they are getting closer to comparable riots as those recently seen in Greece should they proceed with what the Greek rumormonger has been dreaming of:
The head of
the CSU in the European Parliament Markus Ferber, however, rejects aid
from the EU and its Member States for Greece and categorically to
commercial banks that take part in consequence of the crisis on
speculation against the euro, to impose stricter rules. "Greece is a bottomless pit. Giving now that money would be a big mistake," said Ferber to Handelsblatt Online. Ferber expressed her concern, given the ongoing crisis triggered by speculation against the euro, Greece. The CSU European politicians called for strict rules to prevent such speculation. "Emergency escape must be participating banks under the license," said Ferber. About an initiative he would soon talk with EU internal market and services commissioner, Michel Barnier.
Ferber said that a German participation in an aid package for Greece was prevented by legal reasons. "The Constitutional Court has ruled in its Maastricht ruling that
German participation in a bailout of another country from the German
ratification law would no longer be covered," said Ferber.
Rather than rely on aid from the EU, Greece could try on new bonds to raise money, so Ferber. "If it is more
expensive in Greece than in Germany, incur debts, then this corresponds
to market rules. The U.S. is no different if, for example, California
pays a higher risk premium than Nevada," said CSU European politicians.
Sure enough, recent PR (or lack thereof) escalations by Greece, which has so far not gotten its way, apparently have not led to any material deterioration in German opinion toward the defacto insolvent PIIG (or at least so the far more diplomatic Germans claim).
Greece's government is trying, however, in dispute with Germany not pour oil into fire. The
question of German reparations for the occupation in the Second World
War would not now put on the agenda, said Vice Foreign Minister
Dimitris Droutsas the Handelsblatt. Ahead of the visit to Germany by Prime Minister Giorgos
Papandreou Droutsas stressed the "very close and cordial relations"
between the two countries. While Athens would overcome the acute financial crisis on their own. To do this, but need the political solidarity of the EU partners - and especially the support of Germany.
The question of German reparations was open, in fact, said Droutsas. "But we want that now do not make the
topic completely and mix with the current financial difficulties of
Greece." In view of the "special sympathy felt by many German for
Greece," one should not focus on the misunderstandings and mistakes of
the past but the present and see tomorrow, "said the politician:" I am
optimistic that together we can achieve much. "Regarding the meeting
with Chancellor Merkel, to Papandreou and Droutsas come together in
Berlin on Friday, the minister said that Athens was now waiting for
Government a "really strong political support."
We eagerly await to see what Greece's increasingly marginalized rumor spreader's next steps will be.