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Counter Revolt In Germany: Gagging “Hardliners” As the Economy Tanks And Future Exports Drop Into The Red Zone

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Wolf Richter   www.testosteronepit.com

A hullabaloo has flared up in Germany over squashing democratic discussion on whether or not taxpayers should endlessly pay to keep Greece in the Eurozone and protect bondholders—the ECB and national central banks—from having to recognize reality on the worm-eaten Greek debt in their basements. The tools: political pressure, fake moral outrage, and ridicule. And not just in Germany. NPR announced on Sunday that only some “hardliners” in Germany were standing in the way of the world being saved by the ECB and German taxpayers.

The pressure comes from all sides: Chancellor Angela Merkel should forcibly shut up these unruly, inconvenient, sound-bite-hungry “hardliners” that make so much sense to the people who’ll have to pay for it all. Prime target: Alexander Dobrindt, General Secretary of the CSU, Bavaria’s sister party to Merkel’s CDU. His exasperation with successive Greek governments, their lies and broken promises, their extortion efforts and demands for ever more money has bled through. So he told the tabloid Bild that he sees “Greece out of the Eurozone by 2013.” After which it would get a Marshall Plan, he said. And rumors that the ECB would soon buy potentially unlimited amounts of sovereign bonds incited him to call its President Mario Draghi “the counterfeiter of Europe.”

He “is playing with fire in the European house,” warned Andrea Nahles, General Secretary of the opposition SPD. This must be forbidden; Merkel’s reminders to tone down the rhetoric and wait for the big Troika report simply weren’t enough, she warned. Thus has begun the process of strangling democratic discussion on an expensive and risky engagement for taxpayers.

The gagging attempts came even from the ranks of Dobrindt’s own coalition. “Europe is too valuable to endanger it with populist yapping,” said Justice Minister Sabine Leutheusser-Schnarrenberger; she demanded that his boss Minister-President of Bavaria Horst Seehofer gag him personally. Dobrindt was ridiculed as “Stammtisch clown.” CSU colleague Max Straubinger called it “provincial griping.” He was worried that Greece, with a devalued drachma, could no longer afford to buy imports—thus German exports—and that other dominos would fall.

Exports, Germany’s sacred cow, are already being slaughtered, and the country is awash in layoff talk. Friday, it seeped out that Opel, GM’s bleeding subsidiary, had a “secret strategy” of cutting 30% of its workforce—which the company hastily denied. Earlier last week it emerged that Siemens, Germany’s third largest employer, was planning to cut jobs to counteract orders that had collapsed by 43% in the first three quarters! Retailers like Karstadt announced layoffs. Steel conglomerate ThyssenKrupp is cutting hours.

The Ifo Business Climate index, after having dropped sharply in July, skidded further in August as the economy “continues to falter.” All-important export expectations slipped into the red zone for the first time in nearly three years. And retail expectations were down for the sixth month in a row—exacerbating a debacle in the making [read.... The German Economy Caves, And Eurozone Bailouts Take On New Dimensions].

Industrialists are worried that a Greek exit, or its delay, could drag down other countries, and thus demolish German exports—a political nightmare for Merkel. Hence the need to hide behind something big and impenetrable, namely the Troika report, that could protect her both ways.

So she issued a dictum not to invoke Greece’s exit until after the report has come out. Much depends on it. Merkel and her ilk cite it as basis for their future decision on Greece, and they’re all going to hide behind it, regardless of how they will ultimately decide. It will be an effective cover even if an extension of two years and many more billions are approved—highly unpopular in Germany where 72% of the people were against such measures. But it wouldn’t matter; from Merkel on down, they’d all take cover behind the Troika report which would ostensibly tie their hands with incontrovertible “facts,” and it would catch all the blame.

Troika inspectors will return to Greece in September to sort through its economic mess and quibble with officials for much of the month. The report will likely be delayed until October, and a decision on Greece, especially if negative, may well drag into November—past the US elections, just as President Obama was rumored to have requested. Cobbling the report together is “a fairly extensive and complicated process,” said Merkel’s spokesperson Steffen Seibert; and there would be no “prescribed deadline.” Which confirms what has been her strategy all along. Read.... Letting Greece Twist In The Wind.

And here, in our own American Greece, which is the great State of California, a surprising corruption scandal has bubbled up—surprising because it’s in rural Northern California, the bastion where Republicans go to escape the Democrats’ nanny state—and it’s hounding private businesses and famers alike, by hard-hitting Chriss Street.

 


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Wed, 08/29/2012 - 04:53 | Link to Comment falak pema
falak pema's picture

Pax Americana is in big trouble, but the current shenanigans is to save it and its essential components which benefit all of first world on "face TBTF value" : USD/EURO marriage, US nuclear hegemony, Oil pipeline control to industrial world. 

The price to support this system is getting higher and higher; especially now as the first world lives of third world slave labour and recycling of its economic surpluses as debt lending to Pax Americana construct, including Euro/Japan surrogates. 

As the runaway machine is now totally out of control and the private banking wealth of those who built and run Pax Americana is under  threat, the confusion has reached epic levels. DO we save the sinking ship by more printing or do we return to sanity in dire depression reset?

WHat Merkel decides will condition the SPEED at which the ship will sink; not the eventual outcome. As that is already written in the wind!

Play on hopium-dopium sellers  and Concentration Camp Bernanke!

Schulz, where are you Schulz....Where is the list of usual suspects? Those who doubt we are doing God's work !

I don't for one think they be sitting in Karlsruhe, but we'll soon find out! Miracles do happen. 

'To be or not to be' is now scheduled to play out on Sept 12. 

Tue, 08/28/2012 - 09:35 | Link to Comment jayman21
jayman21's picture

People trying to control other people. 

Free people do not try to control others. 

 

Blowback is a bitch.

Tue, 08/28/2012 - 06:47 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

Germany has been a part of all of this.  No small part of their economy is exports to the PIIGS.  How do they walk away and maintain their exports and their economy?  Is it really as simple as embracing the DM?

Tue, 08/28/2012 - 11:46 | Link to Comment covert
Tue, 08/28/2012 - 06:58 | Link to Comment saturn
saturn's picture

Please! Germans! Do not kick out Greece before I am re-elected!!!!!!!!! \O/

Tue, 08/28/2012 - 09:23 | Link to Comment lakecity55
lakecity55's picture

What secret information will you give us in exchange?

"anything."

Tue, 08/28/2012 - 06:33 | Link to Comment blueridgeviews
blueridgeviews's picture

If the ECB's handling of the PIIGS is any indication of the future of the EURO then the Euro is finished.

Common sense would dictate one get rid of the deadbeats.

Of course if you are protecting someones wealth from the inevitable then you might not use common sense.

Tue, 08/28/2012 - 08:07 | Link to Comment Ghordius
Ghordius's picture

I disagree. "Common sense would dictate one get rid of the deadbeats". Common sense - here in europe - is that you don't treat a sovereign nation that harbours an unique culture, often with it's own language and customs as a "deadbeat".

We had enough wars. We have now treaties. We seriously try to keep them. You know, trying to do the "grown-up thing". And "getting rid of them" is against the treaties.

Did you ever notice how insulting and juvenile this "financial" term "PIIGS" is?

Is this not quite telling about the bunch that currently populates the key banks in the two major financial centers of the world?

Yes, the "wealth protection" part is a component in all this. But making this the key driver would be quite bad, and frankly I think the current compromises are not that bad. We'll see.

Tue, 08/28/2012 - 09:30 | Link to Comment CH1
CH1's picture

LOL... and those treaties can override mathematics too?

Tue, 08/28/2012 - 10:50 | Link to Comment Ghordius
Ghordius's picture

nope. of course not. but math does also tell you that your aged grandmother will never be productive anymore. and I don't think that you use math to explain her why you want to "get rid of her".

Tue, 08/28/2012 - 09:52 | Link to Comment monad
monad's picture

Some math teachers really suck. Krugmanomics 101

Tue, 08/28/2012 - 06:43 | Link to Comment bigkahuna
bigkahuna's picture

And this is typical government behavior anymore. Protect your wealthy friends until the wheels fall off, screw over every-fucking-one else. These assholes, all of them, need to pay for their crimes - politicians, banksters, and all of their enablers-oh wait, that includes us all then! One things for sure - WE are gonna pay, and mostly with our own hides.

Tue, 08/28/2012 - 05:41 | Link to Comment schadenfreude
schadenfreude's picture

Wolf Richter never got it right with his articles about Germany. Look at the facts first. Dobrindt voted "YES" for the ESM, so he is not in dissent (officially) to establish an EU institution, which in fact can take over fiscal control over EU countries.

His statements could be personal motviated (catching votes for next elections) and/or states party CSU motivated (of course to catch some votes next elections) or he could simply play the bad cop part on behalf of Merkel. You'll never know.

Tue, 08/28/2012 - 03:30 | Link to Comment New_Meat
New_Meat's picture

"But of course a typical English-speaking pundit is completely confused, then he expects this kind of "base-democratic-discussion" to happen once every four years, max."

Probably you mean "American-speaking" since most of the others have the concept of "dissolve Parliament."

- Ned

Tue, 08/28/2012 - 06:49 | Link to Comment Ghordius
Ghordius's picture

+1, Ned. I stand corrected. Though I find in my own environment lots of Britons that don't understand their own system. And the act of dissolving Parliament is special, in the Westminster system (which is anyway very special in so many matters).

Tue, 08/28/2012 - 03:07 | Link to Comment Ghordius
Ghordius's picture

<sigh> after decades of not caring how the German political process functions the English-speaking financial pundit world is lending an ear and the confusion is perfect.

The key institution in the German political setup is the Bundestag, a completely unknown body that - surprise, surprise - is also the blueprint for the key and unknown (or unmentionable) institution of the EU, the Council.

Every "Bundesland" has an elected Parliament that, usually by coalition of parties, sets up a "Landes"-Government, headed by a PM with a cabinet of ministers

Every Bundesland sends - according to size - part of this government to the Bundestag, where the PMs and a few ministers form a block.

The Bundestag is comparable to the US Senate (before the 17th amendment but formed out of the local executive).

Each "Landes"-block or State-delegation/government has to vote unanimously or - and this is special - their votes don't count. This forces the governments to discuss quite a lot in the local parliaments about how they are going to vote on every major item and every law that concerns Germany. Because the Parliaments can change the governments if unhappy with them.

And so yes, this means that the process is continuos and very local and incredibly federal. And very chatty. And forceful, we are talking about Germans, remember?

But of course a typical English-speaking pundit is completely confused, then he expects this kind of "base-democratic-discussion" to happen once every four years, max. And so every shout of "shut up" and every squabble is seen as some nefarious thing, instead of the usual - in Germany continuos - party "dressing the ranks" exercise.

Of course it would be too much for some to discover that the Germans have world-class democratic institutions.

It's much easier to have a guy with a German-sounding name writing articles called "Counter Revolt In Germany: Gagging “Hardliners”". This is utter bullshit. They are discussing how the Bundestag votes have to look like. The system forces it.

Tue, 08/28/2012 - 07:34 | Link to Comment disabledvet
disabledvet's picture

not for nothing but "has anyone in Europe done anything since this crisis began"? doesn't really appear to be so to me..."outside of a lot of big numbers being flung about." So now we know they have even more debating societies in the EZ than they do in the USA and Britain...and Japan I would imagine. Doesn't sound surprising. The question to me is "by doing nothing is something wrong going on here"? The end result should be a vastly weaker euro should it not? And...honestly...why is this a bad thing if what i say is true (how dare you doubt anything i say as untrue...) and the euro tanks in the coming weeks and months? I think folks have to get their heads out of their butts...most of the policies in crises such as these are established within the first few year of months. That's why i think how events unfold vis a vis the economics seem rather straightforward: Germany has always held the advantage in the euro crisis. What is going to happen to change that? At least in the forseeable future i see nothing. the EZ simply seems to "accept" this as a price that must be paid for their welfare states. The US response obviously has been far different...and almost totally geared to "ramping up" the private sector wealth machine...the irony of course being it was this machine that blew up the whole US economy...and profited from that blow up as well i might add. needless to say "it's created wonderful copy for guy's like me."

Tue, 08/28/2012 - 09:08 | Link to Comment TPTB_r_TBTF
TPTB_r_TBTF's picture

.

Germany has always held the advantage in the euro crisis. What is going to happen to change that? At least in the forseeable future i see nothing.

 

Germany will enter into a Recession and become one of the PIIGGS itself.  There is still room in "PIIGS" for another "G".

Tue, 08/28/2012 - 05:12 | Link to Comment Terp
Terp's picture

First off, please do not confuse the Bundestag (federal level) and Bundesrat (state level).

Second: "Of course it would be too much for some to discover that the Germans have world-class democratic institutions."

^that was a joke, right? The german electoral system is highly undemocratic and is purposefully crafted to marginalize dissent by putting the parties above the individuals.

The reason why you hear state politicians speak up is that these folks actually have to face their electorate on a regular basis (unlike the idiots in the Bundestag) and will be tarred and feathered if they keep throwing money into the abyss.

 

Tue, 08/28/2012 - 07:21 | Link to Comment Ghordius
Ghordius's picture

Terp, I'm sorry, but you are confusing the matter. The German Parliamentary system is based on two Chambers that have to approve every law.

One is the directly elected Bundestag (the lower chamber that also forms the Federal Government)

The other is the mentioned Bundesrat. The higher chamber, 69 seats/votes voting in blocks. Have a look yourself:

                 http://en.wikipedia.org/wiki/Bundesrat_of_Germany

No federal law can be passed without the two chambers agreeing. So yes, the Bundesrat is both the executive of the States AND part of the legislative of the German Federal State AND it's based on the constant approval of the State's legislatures.

Your comment about "The german electoral system is highly undemocratic..." is totally specious. Germany has a multi-party arrangement where you find parties like the Greens, the Liberals, the Social Democrats and two brands of Christian Democrats (conservatives). And every one of those parties risks poltical annihilation at the urns - the real strenght of multi-party. You can have an impact with a small party and You can fail.

And the German political system faces continuously the electorate, both at a federal level and at the "Länder" level (with a different cycle per "Land"). Those "idiots in the Bundestag" are the Governments of the Länder, based on the ruling coalitions in those states. And if you look at the political calendar, you have practically all the time some elections going on, they don't renew the state parliaments at the same time.

The above explanation serve to understand why the lower level is important at the federal level, why the parties are very local/federal and why there is so much constant friction, chatting and discussion on important matters.

If an important Land changes it's coalition or this local coalition changes it's opinion or composition this has often an immediate repercussion on the federal level, and so on what the Chancellor's government can do or not do.

Tue, 08/28/2012 - 07:38 | Link to Comment disabledvet
disabledvet's picture

Bundes-splatt. Gunder-smack. Sound like heavy metal bands to me. Who's winning in this "battle of the bands" anyways?

Tue, 08/28/2012 - 07:36 | Link to Comment Terp
Terp's picture

Do not lecture me on our legislative proceedings.

I never claimed that the Bundesrat (states) do not have to vote on proposed laws. My point is that party line always trumps individual conscience and that all that is given is a fake choice between arbitrary colors (black,red,yellow,green) that claim to make a difference, yet all pursue the same goal (keep the ponzi running and the status quo intact).

I´m sure the same id true in every western "democracy", did it make any difference which color was at the helm in the last 40 years where you live? I somehow doubt it.

 

Tue, 08/28/2012 - 07:52 | Link to Comment Ghordius
Ghordius's picture

and what is your alternative? you brought a comment on the tune of "don't confuse the two levels...", then you proceed with a "don't lecture me..." and now you say that it's "all party lines".

If you are against democratic systems per se - or if you are in favour of systems with referenda (as I am), then I would have expected a different comment at the beginning. perhaps I'm misunderstanding you. on how parties are supposed to function, perhaps.

nevertheless, I was just trying to explain why the German political system produces so much continouos "noise", as if the electoral cycle would nearly always be "on". Is the explanation clear and understandable or do you disagree on that?

As about your question, the answer is yes. I passed my life in several eurozone countries and I see a lot of improvements through political involvement of serious people involved in parties. And the color of the ruling parties had always a greater impact, for good or for worse. That's my experience. It's not all fine, it's not heaven, but it's not all bad.

Tue, 08/28/2012 - 08:53 | Link to Comment Terp
Terp's picture

I said you confused the two legislative bodies because you claimed that parts of the state parliaments formed the Bundestag, which is incorrect.

The Bundestag is in part elected directly, the rest is filled with party members according to their parties share of the vote.

The institution you meant is called the Bundesrat.

 

I never said I was opposed to a democratic system, I said the german electoral system undemocratic (because people nobody elected get to be MPs).

 

The assessment that german politicians are always campaigning is correct though, that is because there is always a state election round the corner somewhere, the cycle doesn´t just seem on, it is.

 

Tue, 08/28/2012 - 10:46 | Link to Comment Ghordius
Ghordius's picture

Terp, I sincerily beg your pardon. +1 

My fault <slaps head>, in my first comment I wrote "-tag" when I was harping about the "-rat". I hope the second comment rectified it. It's my congenital speed-reading problem, can't switch it off...

Now of course I understand your beef: the hideously complex system around the lower chamber system. Nevertheless, without going into the details of the "Ueberhangmandate", I believe it's possible to say that simplyfied it's "half direct personal first-around-the-post per district" and "half for the party ticket". But this is the way the voters understand and want it.

The first vote is for Mr. Schmitt or Ms. Müller, the second is for a party ticket. So yes, with the first vote you have a name, with the second you have a brand. Of course you have then less specific say on who is going to be elected in half of the parliament, but that's the system. And it's based on the ranking of the list, top-down. If the nr.2 of list B does not suit you, you don't have to vote for list B. And nr. 2 - if it's a major party - is anyway probably going to be voted up directly, so we are talking about nr. 45 anyway.

Most German voters want anyway to mix, for example voting directly for a Conservative or a SocialDemocrat with the first and voting the list of the smaller "flavour" parties like the Liberals or the Greens with the second. I don't understand why you find this undemocratic.

Whenever I talk with Germans, if they mention what they voted then it's "double CDU" or "SPD/Greens" or "CDU/Liberals". They very seldom mention a personal favourite. The party is the brand, and that's the way the voters expect it.

The trend in all continental europe is about mixing direct and proportional. It's a popular request.

-----------------

Or, to put it differently: how is a good man or woman going to change anything alone?

IMHO politics can't be based on one individual person. All this presidential direct elections give a "quick fix" of individualism - and then? Solid party work is the only alternative. Sorry.

Tue, 08/28/2012 - 06:17 | Link to Comment MisterMousePotato
MisterMousePotato's picture

What is a "regular basis?" Two years like the U.S. House? Does the German state level congress have any power/sway over the federal level? Does the federal level have any power/sway over Frau Merkel?

Tue, 08/28/2012 - 07:43 | Link to Comment Terp
Terp's picture

State level is voted very 4-5 years, depends on the state.

As the Euro guy pointed out, the get to vote on most stuff and refer proposals back to parliament for changes, or they demand some pork for their states to buy their vote. The usual shit.

The parties involved are the same, though, and many politicians on state level want to get to federal level someday, they are part of a chain-of-command of sorts.

There are no independent MPs

Tue, 08/28/2012 - 08:00 | Link to Comment Ghordius
Ghordius's picture

this current Bundestag has no independent MPs. this does not mean that the electoral system does not allow them. and my point is that it's not a top-down system. in fact, it's a bottom-up system even in the parties. the parties are federal, too.

Tue, 08/28/2012 - 06:36 | Link to Comment bigkahuna
bigkahuna's picture

It s actually all a bunch of bullshit, no matter the country. The Euro guy a few comments up there is almost always trying to apologize for the Euro somehow.

Tue, 08/28/2012 - 04:10 | Link to Comment MisterMousePotato
MisterMousePotato's picture

Are you saying, then, that Frau Merkel simply CANnot act against the wishes of the people? Or, as in America, the Resident can do whatever he wants and Democrats and Republicans alike can do aught but bitch and moan (people be hanged)?

Tue, 08/28/2012 - 05:14 | Link to Comment Terp
Terp's picture

I don´t know what he thinks but it is the latter...

Tue, 08/28/2012 - 02:44 | Link to Comment q99x2
q99x2's picture

NPR - National Propoganda Radio.

Fuck NPR

Tue, 08/28/2012 - 02:15 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

A hullabaloo lol like they care what the people think.

 

The Banksters Have Gotten to the Right German


Tue, 08/28/2012 - 02:03 | Link to Comment Popo
Popo's picture

There's no way out.  Deflationary depression in inbound at warp speed.   No way in hell will Germany (of all countries) go the inflation route.   Anyone thinking it's going to happen is simply unaware of the German national mindset.    

The issue raging in Germany is who will take the blame, and how will politicians (if any) remain in power when TSHTF.    

All sides are waiting for some large scale event to remove all possible traces of potential blame from the players involved.  As such, the world is a powderkeg:  We are all waiting for the kaboom.

Tue, 08/28/2012 - 01:54 | Link to Comment dunce
dunce's picture

Clearly "stamtisch" is a disparaging term for the common people, you know , the kind with common sense that can see through the high flown fraud being passed off as sophisticated finance beyond their limited understanding.

Tue, 08/28/2012 - 07:44 | Link to Comment Terp
Terp's picture

Correct.

Tue, 08/28/2012 - 01:25 | Link to Comment gdogus erectus
gdogus erectus's picture

Small world. I Moved from Redding after having run ins with the same said bastards. And here I sit reading about it in Zero Hedge....

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