Escalation of the Extortion Racket: Now It’s ‘The Dissolution Of Europe’ Not Just The Eurozone

Wolf Richter's picture

Wolf Richter

It has been an onslaught. Eurozone heads of state, top politicians, unelected kingpins, and bureaucratic honchos threatened everyone in sight with the demise of the euro, or promised to do “everything” or “whatever it takes” to save it even if it violated treaties or the very foundation of European democracy. In between the lines, bit by bit, the mammoth costs of continuing the endless bailouts or of breaking everything to pieces finally oozed to the surface.

Sunday it was Italian Prime Minister Mario Monti, whose country, after years of living beyond its means, is suffocating under a mountain of debt. He needs the European Central Bank to print a trainload of euros and massively buy up Italian sovereign bonds to force their yields down and keep Italy financially viable—which is precisely what the treaties that govern the ECB don’t allow it to do, though the ECB had done it before, despite all-out opposition from Germany, including the resignation of ECB Council Member and Bundesbank President Axel Weber and ECB Chief Economist Jürgen Stark. After buying €211 billion in sovereign bonds, the ECB stopped in March. And since then, all heck has re-broken loose.

So Monti went on attack. The Eurozone bailout chaos and Germany’s resistance to ECB printing operations have created tensions that show “the traits of a psychological dissolution of Europe,” he told the Spiegel, a threat designed for German consumption—the latest in a series of escalating threats issued by politicians of debt sinner countries. And like his predecessors, he took it a step further than anyone before him.

Further even than Alexis Tsipras, the firebrand leader of Greece’s left-wing SYRIZA party, who’d threatened during the chaotic election, “If Greece doesn’t get its next loan installment, the Eurozone will collapse the following day.” But now comes Monti—and it’s no longer just the demise of the 17-member Eurozone but the dissolution of Europe. Europe as a whole. If the ECB doesn’t print whatever it takes to bail out Italy, “the foundations of the project Europe are destroyed,” he said.

Then, indefatigable, the unelected technocrat went after democracy itself: “If governments let themselves be tied down completely by the decisions of their parliaments,” he said, and he was directly addressing Germany, “then the breakup of the Eurozone is more likely than a tighter integration”—the latter being Chancellor Angela Merkel’s brainchild and the focus of much of her efforts. Thus he’d lashed out at Germany’s democratic processes, including parliament’s involvement in some of the bailout decisions, limited as it is. Instead of allowing elected representatives of the people who will pay for the bailouts to have a say in the bailouts, Monti wants Merkel and her government to go around parliament and impose their decision on the citizenry.

“Attack on democracy,” is what Alexander Dobrindt, Secretary General of Merkel’s coalition partner CSU, called Monti’s words on Sunday. He lamented that “greed for German tax money is sprouting undemocratic flowers.” He didn’t mince words. “Mr. Monti apparently needs to be told that we Germans will not be ready to abolish our democracy just so that Italy’s debt can be financed.”

On Saturday already, Dobrindt had taken on ECB President Mario Draghi by accusing him of abusing the ECB for the benefit of his native Italy. “It’s striking that Draghi always becomes active and wants to buy sovereign bonds when Italy is once again in a tight spot,” he said. Even Draghi would have to adhere to the treaties governing the ECB. “He must decide where he stands: on the side of the stability union or on the side of the crisis countries that try to sneak their way to German money.”

Higher yields were a sign countries needed to reform, he said, and forcing yields down through bond purchases would only treat the symptoms, not the causes. Draghi’s plans, he said, reveal the life-long lie of European “centralists” in Brussels who want to guarantee “the same standard of living from Athens to Munich.” But this cannot be done, least of all through printing money for debt sinner countries. “That’s euro socialism,” he said.

Six of the 17 Eurozone countries are on life support, including Spain, whose banks got €100 billion, and whose central government will need much more. A bailout far larger than any prior bailout. And then there’s Italy. Leaves one question..... But Who The Heck Is Going To Do All The Bailing Out?

And some food for thought: “Like Europe,” writes David Galland, “the economy of the US has been increasingly under the control of central planners at the expense of the free market.” With devastating consequences. Read.... Have You Overlooked Comprehending This Piece of the US Economic Puzzle?

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Widowmaker's picture

Europe, what a joke.

In America, even if you don't have a fraud-fortune for fucking your neighbor you can own a gun and negotiate.

Alas, in Europe they don't even have rope to piss up because they traded that in for liberal panties and an ice cream sandwich. 

The rule of law is dead.  The question will be whether or not Americans are all toothless Europeans.

No gun, no negotiation after all that was yours was stripped and fed into the extortion racket known as banking -- remember that cock suckers.  You can thank Widowmaker for giving you a chance.  Violence still beats money 10 out of 10.

shovelhead's picture

Go ahead, you know you want to do it...

Just push 'Print'.

It's so easy.

Everybody else is doing it.

Hint: Don't call it the Final Solution. Bad mojo.

ThisTimeIsDifferent's picture

AEP has got it right: the ECB will print.

All the hard line rethoric from Germany is domestic posturing. Especially the CSU-types (Dobrindt and Soder) fear to lose their 2013 state election in Bavaria.

Soder, Bavarian Fin Min, has even attacked HFT during his recent sales pitch on Wall Street. Pathetic.

Finance minister Schauble is the strong guy behind Merkel.

NYT: "He sees the turmoil as not an obstacle but a necessity. “We can only achieve a political union if we have a crisis,” Mr. Schäuble said." (NYT, Nov 18, 2011)


AEP on the crisis:

"The EMU project is a covert assault on the historic nation states of Europe. Any attempt to save it by escalating to fiscal union is to eviscerate parliamentary democracy. There lies grave danger." 

This is correct and it was envisioned already at the time of Delors and Kohl in 1992.

AEP on deflation:

Yet it is churlish to deny that the two Marios have pulled off a feat of statecraft. They have wrested control of the ECB from Gold Standard zealots. The ECB is preparing to act as a genuine lender-of-last-resort for the first time, once the EFSF trigger is activated. It may soon start to reverse the frightening monetary contraction that has bedevilled southern Europe for the last year. Europe remains a political minefield, but the risk of a global deflationary slump has dropped a notch. Hats off to the Italians.


Buy PM now.

mjcOH1's picture

"The German Constitutional Court will send the ESM to a referendum at the faintest whiff of money printing by the ECB. The judges blinked last time, they are not about to make the same mistake twice."


Ah, yes....  "This time it will be different."   :)

michigan independant's picture

 Tribute is collected from them in the form of "legal" debts and taxes, and they believe they are paying it for their own good. They will beg for there own chains in a few more month.

Joe A's picture

We are all going to die!!! ....eventually.

This guy said something like that it is a nuisance that government leaders need to go back to their parliaments for approval of whatever was 'agreed' in Brussels. Of course, democracy is a nuisance if you want to build an undemocratic European superstate.

Alcoholic Native American's picture

The status quo is expensive! You peons better pay up!

WaEver's picture

Hi Wolf,

can you give some exemples of representatives of the people who actually care about tax-payer money ?

monad's picture

The Perestroika Deception, The world's slide toward the 2nd Oktober Revolution by Anatoliy Golitzyn, 60s KGB defector who worked for the CIA. Mikael Gorbechev concurs.

Video summary interview

These EU events were described in detail decades ago. RTFB

Optimusprime's picture

This whole line of Golitzyn/Story "analysis" is distraction, or a form of entertainment from and for MIC types who can't bear to leave the comfort zone of Cold War assumptions. 

The Russkies used the drug trade for geopolitical ends?  Now who could believe such perfidy?  Certainly not the Jew-ridden British (Sassoon empire, anyone?).  Certainly not the US (MENA, anyone?).  Pathetic

monad's picture

Unfortunately for you the events of the last 20 years are consistent with what Golitsyn said in the 70s. Its from the CIA you toy robot. You need to think when you read it. Mena? Bill Clinton went to school in Moscow...

LetThemEatRand's picture

“Attack on democracy,” is what Alexander Dobrindt, Secretary General of Merkel’s coalition partner CSU, called Monti’s words on Sunday."

Really?  You mean private bankers are trying to destroy democracy?  Who could have predicted that?  Cue all of the fucking oligarch worshipers to tell us it's elected government's fault in 4, 3....

BigJim's picture

  Really?  You mean private bankers are trying to destroy democracy?  Who could have predicted that?  Cue all of the fucking oligarch worshipers to tell us it's elected government's fault in 4, 3....

Who do you think enables the 'private' bankers, idiot?

Without 'our' government-sanctioned banks being able to create legal tender out of thin air through fractional reserve lending, and then being bailed out by the government-imposed central bank when they inevitably overleverage, do you think we'd be in the state we're in?

And how has 'our' financial sector gained so much power? Because its endless inflations pay for the bribes required to win the votes of the idiots in our democracies who have been brainwashed into believing in free lunches.

You are a clueless, repetitive troll.

pain_and_soros's picture

Agree with the German politicians' views, but on the other hand, should they be at all suprised that those from the PIGS politicians are vastly more skilled in treachery, bribery, deception and thievery from their own population as well as others? 

The PIGS invented the ponzi & are now trying to perfect it...leaving others to hold the bag (believing themselves to be smarter than the rest & thus able to get away with it)...

I increasingly doubt Germany & its northern neighbours will cave to the PIGS rhetoric - despite the density of the lies & BS, they can see thru it.



Dugald's picture

See through the BS, nein, nein my friend....they will believe its all a Fiendish British Plot....

XitSam's picture

This is starting to sound like when Hank Paulson was threatening Congress with a breakdown of law and order, food riots and civil unrest.

Widowmaker's picture

When it happens, you can thank non other than king faggot of fraud, Hank Paulson.


Joe A's picture

But which continent did he have in mind?

Clockwork Orange's picture


I have only one word.  That is it.  'Stunning'.

God help us.

StychoKiller's picture

Can't you and yer droogy friendz go out an kick their @sses?

vinu02's picture

The way euro is handled, its going to go below 1.


bank guy in Brussels's picture

Myth and error, the EU is about to print and buy bonds massively, like everyone else, to 'save the euro' ... and the ECB just supplied the cash to Greece for August ...

And Wolf Richter is missing a lot in the above article, he is behind the curve

For one thing, the elites of Germany, including Merkel's government itself, are already giving the green-light to euro money printing, in order to save the German banks, insurers and pension funds which are choking with dodgy debt that was issued at 50-to-1 leverage etc. ...

Italian gov't debt is high but Italy's private household debt is quite low ... Italians are richer than Germans after net debt ... Aside from the euro-currency imbalance problem creating the pressure on Italian bond yields, outside the euro, Italy is actually more sustainable than Germany, UK etc. ...

The euro situation is being much better covered by the UK Telegraph's terrific Ambrose Evans-Pritchard, 100% spot-on on the euro crisis ... his most recent article a world apart from Richter's disgustingly titled 'testosteronepit' ...

'Venetian cunning of Draghi-Monti masterplan may save euro for now'

« ... Mr Draghi has secured a mandate for "unlimited open-market operations", a far cry from the half-hearted and self-defeating bond purchases of the last two years. The ECB at last has a licence to act with overwhelming force, like the US Federal Reserve. ...

The ECB is preparing to act as a genuine lender-of-last-resort for the first time, once the EFSF trigger is activated. It may soon start to reverse the frightening monetary contraction that has bedevilled southern Europe for the last year. »

Nachdenken's picture

The USA and the UK have a longer game in mind, and are playing it out on many fields, the Euro is just one of them.

BTW if you ever sweat when working or worrying, you are in the testosteronepit. 

taraxias's picture

Since you're such a big fan of AEP, perhaps you can explain how he concludes that Draghi secured a mandate for unlimited market operations.

The German Constitutional Court will send the ESM to a referendum at the faintest whiff of money printing by the ECB. The judges blinked last time, they are not about to make the same mistake twice.

Draghi should have been making exactly the opposite statements until the German court delivered their decision. This was a major blunder on his part but the option of waiting was taken out of his hands when the Spanish and Italian markets were collapsing, hence the panicked need to act.

Ghordius's picture

+1 for your second sentence. My take on Draghi's main message is here 2681150

Widowmaker's picture

And you're both fucking wrong.

Printing steals from the public, and it's balls to the wall printing --  the joke is on you for thinking it has ever stopped.

Did you say something about justice?   Perhaps you meant closet-justice.  The same fascist justice in the faggot-enriched States.

i-dog's picture

As Ghordius well knows, 'they' will indeed [attempt to] do “whatever it takes”. Their plans depend on it ... nature, not so much....


PS. 13 of the 17 members of the EZ have a combined economy smaller than Germany alone (and only marginally greater than that of France or Spain).

MillionDollarBoner_'s picture

When Draghi prints, Germany returns to the DM.

These are not mutually exclusive events.