This page has been archived and commenting is disabled.

Euro Desperation: German Justices Already Buckled Under Political Pressure

testosteronepit's picture




 

Wolf Richer   www.testosteronepit.com

Jean-Claude Juncker was desperate. The Prime Minister of Luxemburg and newly re-installed President of the Eurogroup—which brings together the Eurozone’s finance ministers to exercise political control over the euro—is the ultimate Eurozone infighter and insider. “We all know what to do, but we don’t know how to get re-elected afterwards,” he’d once said, now referred to as “Juncker’s curse.” But he knows how to get reelected, being the longest serving head of state in the EU—Prime Minister since 1995. So when he is desperate, even the eight justices at the German Constitutional Court listened.

Juncker made his desperation known when he criticized the decision by the justices to take their time—three months—to decide whether or not the latest bailout fund, the European Stability Mechanism (ESM), passes constitutional muster in Germany. It should have been operational by July 1, but with a few words, they’d thrown all bailout convulsions into even greater disarray [Read.... The German Constitutional Court Rules Against Euro Hysteria].

The delay had Juncker on edge. It’s “not helpful,” he told the Spiegel on Saturday, pressuring the eight justices to speed up the process. “I think they know in which maximum time frame we must act,” he said.

Because in September, it’s decision time: the bailout Troika—the European Union, the European Central Bank, and the International Monetary Fund—will decide whether or not Greece should receive the next bailout payment. The chances are not good. It has ignored most of the structural reforms it agreed to implement as part of the second bailout package, and the Troika is losing patience [Read.... Greece Flails About, Troika Inspectors Paint “Awful Picture,” Merkel Draws a Line, German Industry & Voters Back Her: It’s Almost Over For Greece].

If the decision is no, Greece will default on its debt and most likely exit from the Eurozone. The consequences will plow tsunami-like into banks and financial markets. The largest possible firewall would be needed to limit contagion, recapitalize tottering banks, and keep the Eurozone from unraveling. But the temporary bailout fund EFSF is already paying for Greece, Ireland, and Portugal, has committed €100 billion to Spain, and is waiting to bail out Cyprus as well. With its €250 billion limit, much of its dry powder has been spent. Hence, Juncker’s desperation.

And the Court yielded: on Monday, it promised to speed up proceedings. The decision would be made by September 12, in two months rather than three. Another indication that they might yield all the way by nodding the ESM through, albeit with some restrictions. Clearly, they don’t want to be labeled in history books as the eight Germans who killed the largest monetary union ever. They’d leave that up to politicians.

And politicians were scratching each other’s eyes out over it—in a show of just how confused and irrational the end-game-like euro fiasco has become. Because it’s apparently still not clear how, and to what extent, the ESM had been modified during the last EU Summit.

Klaus Regling, the anointed boss of the ESM, announced that, according to the agreement reached at the EU summit, banks would be bailed out directly by the ESM, thus “freeing the country from liability.” Juncker and Olli Rehn, the European Monetary and Economic Commissioner, backed him up.

Outcries everywhere. Sigmar Gabriel, chairman of the opposition SPD, without whose support these bailout measures would have difficulty passing in parliament, threatened to walk away if Chancellor Angela Merkel wanted to “convert the state bailout into a speculator bailout.”

Merkel slapped them down during a ZDF interview: there will be no direct bailout of banks from the ESM, regardless of what anyone says, she said, and countries would have to guarantee the loans to bail out their banks, at least for the time being. Her spokesperson Steffen Seibert later confirmed that “the state requests the bailout, the state receives the money, and the state is liable.” And that, he said, counted for the EFSF as well as for the ESM.

Now it seeped out that Merkel has concealed from parliament some explosive details of the Spanish bank bailout in order to bamboozle parliament into approving it when it comes up for vote on Thursday. Of the €100 billion, the first tranche of €30 billion should be paid in July. But unless parliament approves it, Finance Minister Wolfgang Schäuble cannot vote for it at the EFSF, where unanimity is required. Hence, a no by the Bundestag would axe the Spanish bailout package. Mayhem would break out on the spot.

So, to make sure the bailout vote would sail through the Bundestag, Merkel has cut some corners—or so claimed Frank Schäffler, a member of Merkel’s coalition partner FDP, in a letter to Bundestag President Norbert Lammert. And he asked that Lammert demand from the government to “inform the Bundestag carefully, in particular with regards to direct recapitalization of banks.”

Thus, the euro bailout strategy, so contingent on Germany, has become a disaster of disagreements—even basics, such has the contents of an EU summit agreement, lead to acidic confrontations. A sign that a solution is further than ever away. For the options following the Court’s ruling, read.... Will the Euro Survive This Year?

And here’s a funny video on that dogged Eurozone nightmare by Australian comedians Clarke & Dawe as they’re poking fun at Merkel, Spain, and Italy in “Merkel at Wimbledon 2012.”

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 07/17/2012 - 07:57 | 2623579 ZeroPoint
ZeroPoint's picture

These assholes certainly know how to drag out a painful death.

Tue, 07/17/2012 - 06:50 | 2623449 SmoothCoolSmoke
SmoothCoolSmoke's picture

Oh boy, another "ultimate deadline" with Greece.  How many of those have we had n the past 2 years?  Forgive me if don't shit my pants on this one.

Tue, 07/17/2012 - 06:45 | 2623430 michigan independant
michigan independant's picture

Modern tower of Babel. The more they try, the more damage it will do. He who oppresses the poor to make more for himself
Or who gives to the rich, will only come to poverty.

Political seduction takes many forms. Ellul has explored some of these forms in his book Propaganda. One type he calls "agitation propaganda," which leads men from resentment to rebellion. Once change has taken place, "integration propaganda" takes over, making men adjust themselves to desired patterns. Ellul points out that modern propaganda cannot work without "education." He calls "education" (or what usually passes for education in the modern world) "pre-propaganda" -- the conditioning of minds with vast amounts of incoherent information, already dispensed for ulterior purposes and posing as "facts" and "education." Propaganda thus creates pseudo-needs, -- for which it then provides pseudo-satisfactions. And who is more omnicompetent to provide these "satisfactions?" Nimrod knew. They are doomed

Mon, 07/16/2012 - 22:50 | 2622903 steve from virginia
steve from virginia's picture

 

Unspoken is the reality that creeping bailouts by Germany cannot solve anything. Germany has the shred of solvency, only a shred.

Germany requires external capital like all the other EU states, it looks good held up to the other states but has all the same problems: excess debts/deficits/wasteful capital expenditures over decades. It's 'growth' is a flimsy facade, borrowed against the accounts of its customers.

Now the customers have run out of money. Horrors, how could that have possibly happened?

The unraveling is a matter of time, the need for funds to keep the next deleveraging leg at bay is constant, the amounts staggering, beyond what any combination of countries can 'earn'.

Nations need to prepare for hard times, for they are most assuredly coming.

Tue, 07/17/2012 - 03:19 | 2623348 Buck Johnson
Buck Johnson's picture

This game has to end and many know it, but they don't want to be blamed as the one or ones that took down the EU.

Mon, 07/16/2012 - 22:45 | 2622886 Bicycle Repairman
Bicycle Repairman's picture

LOL.  Wait a minute.  Are you telling me those 8 red suited pseudo-academic coat holders are starting to cave in?????  The guys who are descendants of Roland Freisler?  No way, dude.  There is a 67 year tradition to uphold here.

Tue, 07/17/2012 - 01:10 | 2623239 Nachdenken
Nachdenken's picture

Bikeman .  hope you are right.  German/Austrian/Netherlands/Finn solvency is the Euros Last Lifeboat which will sink with the ship unless there is some clarity and courage at this late phase.

Tue, 07/17/2012 - 00:51 | 2623207 Lednbrass
Lednbrass's picture

Freisler was certainly a die hard agent of State power, but he also would have had the people trying to make Germany fork over to subsidize the rest of Europe hung (if they were lucky).

Mon, 07/16/2012 - 22:59 | 2622837 essence
essence's picture

Don't underestimate the power of the banking cartel. They have long since installed (what effectively amounts to agents) in most walks of government,industry,media and military. The power to create money and credit means ... the power to control.

Merkel is a puppet, same as obama and cameron.

Note how the answer to overwhelming debt isn't dispensing it by defaults. Apparently it doesn't even include countries living under a balanced budget. No, the solution relentlessly offered up is a consolidation of power into a select unelected few that will supplant elected governments and run the EU without reproach. Oh, and save the big multinational banks too.

The EU doesn't need an all powerful central government and bank. They could still have free trade and easy cross border travel without monetary union and certainly without relinquishing sovereignty to unaccountable,bankster selected bureaucrats . Let the big banks fail, have the respective governments oversee liquidation of  the big banks and get them under new ownership. Note how that alternative doesn't get any news coverage, no, instead the Euro main steam media drums the message into the masses that it's consolidate, fiscal union, euro bonds ....  or perish.

The banksters are playing the euro public like fish on a line.

 

 

 

Mon, 07/16/2012 - 22:10 | 2622771 Bennie Noakes
Bennie Noakes's picture

If the German high court is anything like the US one, its entire reason for existence is to sanctify and legitimize power grabs by the other two branches of government. (After an appropriate period of serious and pious deliberation, just to show that they are truly independent and not just stooges for the other branches.)

There is not a chance in the world that the German court will block the bailout. At worst, they might tack on a few extra conditions that are easily worked around. But nothing that would prevent the bailout from going forward.

Mon, 07/16/2012 - 22:18 | 2622799 Seize Mars
Seize Mars's picture

Correct. They are bought and paid for just like their American counterparts.

 

Mon, 07/16/2012 - 21:37 | 2622657 piceridu
piceridu's picture

Replace German Supreme Court judges with EPL soccer refs...problem solved

Mon, 07/16/2012 - 21:29 | 2622621 Freddie
Freddie's picture

Maybe they could deport illegal aliens and cut the salaries of "civil servants" by 30%.   Oh they cannot do that.

Tue, 07/17/2012 - 01:08 | 2623236 Bobportlandor
Bobportlandor's picture

How about civil servants will bear all losses.

Mon, 07/16/2012 - 22:26 | 2622819 world_debt_slave
world_debt_slave's picture

Better yet, outsource all branches of government to India and China.

Mon, 07/16/2012 - 21:19 | 2622565 q99x2
q99x2's picture

Just let the Germans say, "Nein."

And be done with it already.

Mon, 07/16/2012 - 21:19 | 2622564 BeetleBailey
BeetleBailey's picture

Jean Paul needs to get his junk kicked.....again and again....and AGAIN!

Mon, 07/16/2012 - 21:16 | 2622547 TahoeBilly2012
TahoeBilly2012's picture

No wonder WW1, 2 and now #. History starts to make sense now.

Mon, 07/16/2012 - 20:53 | 2622462 disabledvet
disabledvet's picture

It's not like we ever had Court ruling on the (admitted) illegality that the Fed engaged in "to save the world."http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1004&context=w...
as the article shows Maiden Lane was completely illegal. The Fed had no legal authority to buy up the assets of AIG or to finance a merger between Bear Stearns and JPMorgan Chase. As i recall Paul Volcker even admitted this...publicly in the media no less. Compared to what's going on in Europe as presented here "this seems trivial." Something about "Chancellor's prerogative" or something isn't it?

Mon, 07/16/2012 - 22:02 | 2622750 andrewp111
andrewp111's picture

Anything can and will be done in an emergency. Not as a matter of law, just reality the way it is. The German Constitutional Court is an irrelevant sideshow.

Mon, 07/16/2012 - 22:32 | 2622838 bigkahuna
bigkahuna's picture

I know we're dealing with the global banking cartel, though I wonder how fed up the Europeans are getting with the socialism? I believe that the Europeans, particularly the Germans, might just be a bit more upset than the MSM is letting on.

Mon, 07/16/2012 - 20:49 | 2622440 world_debt_slave
world_debt_slave's picture

The Germans have been pussified ever since the end of WWII.

Tue, 07/17/2012 - 00:48 | 2623204 Lednbrass
Lednbrass's picture

Well, the US used the same model there that they did in the American South. Seize control of the educational and media apparatus, tell them that their history is bad and evil, hammer guilt into the heads of kids all day every day, effeminize the males and masculinize the females, and rot their brains with a never ending stream of propaganda masked as entertainment to reincforce it all.

Tue, 07/17/2012 - 02:05 | 2623284 world_debt_slave
world_debt_slave's picture

yep, and also at the turn of the 20th century the Rockefellars started their socialization of the United States.

Mon, 07/16/2012 - 20:29 | 2622367 malek
malek's picture

 Sigmar Gabriel, chairman of the opposition SPD, without whose support these bailout measures would have difficulty passing in parliament, threatened to walk away if Chancellor Angela Merkel wanted to “convert the state bailout into a speculator bailout.”

That clown is beyond words.

Mon, 07/16/2012 - 20:28 | 2622363 ghenny
ghenny's picture

You may be right but the tsunami engulfing the banks over LIBOR and CDS may give enough members pause that they let the court carry their water for a couple of months.  We shall see.  All this of course is only the second act in a play of many acts that may yet result in revolution across the developed world.  This revolution - by the way - needs to happen if most of us are to avoid becoming serfs on a giant bankster-drug gangster alliance controlled plantation.

Mon, 07/16/2012 - 20:23 | 2622345 dogbreath
dogbreath's picture

i am going over for a few weeks.  it should be interesting.

pilsner bitchez

Mon, 07/16/2012 - 20:22 | 2622337 zero19451945
zero19451945's picture

Always count on the politicians to sell out their people.

Mon, 07/16/2012 - 20:12 | 2622315 eigenvalue
eigenvalue's picture

The Bundestag will approve the Spanish bailout on Thursday. Nobody dares to stand up against the banksters. The Germans have to learn to swallow it. 

Tue, 07/17/2012 - 05:56 | 2623416 Peter Pan
Peter Pan's picture

Loans do not alter the state of insolvency nor do they restore budgetary balance. All these efforts are the equivalent of trying to make grapes out of wine. The Europeans are trying to retrospectively make up for the initial failings of the Euro from inception. Funny to observe but sad in its ultimate outcome.

Tue, 07/17/2012 - 01:56 | 2623279 El Oregonian
El Oregonian's picture

Shove one ounce round gold maple leafs down their frigg'in bankster windpipes. Choke those bastards out until their lifeless corpses are finished and their putrid stained souls rot and burn in hell for time eternal. Then, and ONLY then, will this mess finally clean up...

Tue, 07/17/2012 - 00:33 | 2623177 Cast Iron Skillet
Cast Iron Skillet's picture

yup, they're all completely terrified by the banks & the banksters.

Mon, 07/16/2012 - 20:29 | 2622368 ghenny
ghenny's picture

You may be right but the tsunami engulfing the banks over LIBOR and CDS may give enough members pause that they let the court carry their water for a couple of months.  We shall see.  All this of course is only the second act in a play of many acts that may yet result in revolution across the developed world.  This revolution - by the way - needs to happen if most of us are to avoid becoming serfs on a giant bankster-drug gangster alliance controlled plantation.

Do NOT follow this link or you will be banned from the site!