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Next Phase in Merkel’s Desperate and Risky Gamble
Wolf Richter www.testosteronepit.com
The conflict within the Eurozone has been simmering for weeks. On one side: German Chancellor Angela Merkel and her efforts to protect and promote her oeuvre. On the other side: Socialist François Hollande who is running against President Nicolas Sarkozy in the French presidential elections. But now, Merkel has raised the stakes by roping in three powerful allies and lining them up against Hollande—a desperate and risky gamble to keep Sarkozy in power.
She has been riding a wave of economic strength at home, with unemployment at a two-decade low (but a dive into the Federal Labor Agency’s report reveals a much darker story: read.... German Unemployment Obfuscation). And from that foundation, she has labored to create a fiscally united Europe of balanced budgets and “structural reforms”—a euphemism for lowering the cost of labor, including wages and benefits in southern Eurozone countries. It’s her prescription for getting out of the debt crisis. And throughout, Sarkozy held his nose and supported all of her remedies, whether he liked them or not, and together, they pushed through the fiscal-union pact that 25 of the 27 EU members signed in record time.
But Hollande is threatening to unravel her oeuvre: he wants to institute Eurobonds to spread risks; he rejects austerity policies and insists on stimulus; and he wants to renegotiate Merkel’s sacrosanct fiscal-union pact.
As President of France, he may find support among EU states for his policies. To prevent that, Merkel has set out to beat him on French soil before it’s too late. In early February, during a joint TV interview with Sarkozy at the Elysée Palace, the official residence of the French president, they both berated Hollande. Quite a show amid the gilded splendor of the palace—and a first in French history.
And now it has leaked out that Merkel has advanced to the next phase in her fight against Hollande: She roped in three powerful allies, Italian Prime Minister Mario Monti, Spanish Prime Minister Mariano Rajoy, and British Prime Minister David Cameron. All are conservatives, and they were "scandalized" by Hollande's plan to renegotiate the fiscal-union pact—though ironically, Cameron himself had refused to sign it. And they have entered into a confidential verbal agreement to boycott Hollande. Their motto: don't give him a platform. And they agreed not to receive him when he visits their countries. A nasty slap in the face.
Top French presidential contenders frequently travel abroad and meet with leaders of other countries to appear, well, presidential. This included a rather amateurishly scripted trip by Ségolène Royal to China in 2007 when she ran against Sarkozy. So Hollande has been trying for months to get an appointment with Merkel. In vain—though the leaders of the opposition SPD received him when he was in Germany. Rajoy, Monti, and Cameron have also spurned him.
But the boycott heightens the risks in Merkel’s desperate gamble: the latest polls show just how much of a steamroller Hollande has become. During the first round on April 22, when a number of candidates fight it out for the top two spots, Hollande would obtain 30.5% of the vote, and Sarkozy 23%, well ahead of the rest of the field. In a faceoff between the two in the second round on May 6, Hollande would demolish Sarkozy with 58% of the vote against 42%. In French politics, this kind of lead against an incumbent is a phenomenon.
Hollande reacted on Sunday morning: "We're a great nation, and a great country, whose choices will not be determined by the heads of state and governments that are our friends.” And he issued a veiled threat: "There comes a moment when Germans say it's better to allow the French to choose freely, without pressuring them, so that the relations between France and Germany can remain relations of friendship."
These machinations show just how brittle the Eurozone has become. And now Sarkozy and Merkel both face economic headwinds, as evidenced by an all-important industry. In France, new vehicle registrations have plunged for three months in a row, with French automakers suffering the most. While German automakers were basking in last year’s glow of record worldwide sales and profits, registrations in January and February have stagnated. Read.... Trouble at the Core of the Eurozone.
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Is it just Kabuki theatre....or in fact Fukushima for the Euro...?
"Italian Prime Minister Mario Monti, Spanish Prime Minister Mariano Rajoy, and British Prime Minister David Cameron". An unbeatable team of the leaders of the most broke-ass countries in the developed world. Surely this can't go wrong. How could you not trust these geniuses?
Looks like it's oeuvre for Sarkozy.
Merkel is part of the illuminati as Helmut Kohl was, you can read of Helmut Kohl's visit to the Bohemian Grove in Cali, in his autobiography.
Hollande and Sarkozy are like two bald men fighting over a comb. As far as Germany inserting itself into other nation's domestic politics, what could possibly go wrong? It's as if the current crop of "leaders" fell out of a stupid tree and hit every branch on the way down.
Nah, they don't actually fucking care. They'll gladly be the enablers of a new age of intra-european hate, for the sake of personal contributions.... err, i mean, for the sake of europe (after all, the european looting and firesale, is all about solidarity and europe, right?........ right?)
I think there may be a joke about a popular fairytale in there somewhere, but i just cannot pinpoint it at all.
I have to admire germany. They have great apprenticeship programs and sensible labor health care and educational policies. Its too bad they have to live on such a fucked up continent with mediterranean beggers.
A euro bond is a german bond. It is always easy for a socialist to support use of other peoples money and other peoples credit rating.
Umm, i think you're dreaming of a pre-euro germany. The policies you mention were the "rule of the nation", until the EMU agenda requested german politicians (leftwing by the way) to reject and/or circumvent those things.
That is not to say, that i think that everything pre-euro was great. I do think that quite a few programs were done inefficiently and "overly nice".... but what was established post-euro, was nothing more than "mini-china", and trying to be the first in the race to the bottom. Which of course is the reason for that entire fake export boom, bought on loans (loans of whom the population won't see a single penny, in addition to purchasing power beeing slashed to a THIRD).
Bottom line: Pre-euro, germany was a nation of fat savings, fat incomes and fat social programmes.... contrary to what some people around here may immediatelly expect - that actually worked out only "someway bad" in total... there was a deficit that should have been fixed.... but it was nothing compared to the REAL deficit that is in place now, if you take into account buying fake-export profits on credit via loans. What germany is now instead, is just a slightly less worse nation than the USA: depleted savings, rockbottom incomes.... yet just a "high" level of poverty, as opposed to a catastrophical one.... which will seem to work, until the music stops playing and the actual finaces become visible.
And of course "the US President is a D(d?..r?)emocrat." Not to insult anyone's intelligence here of course...just noticed "this fact wasn't mentioned" in the above article.
I can’t help thinking of Prince Bismarck, the Iron Chancellor who spent his entire career making sure Germany would not be isolated and surrounded by enemies and may have to fight war on two fronts—against France and Russia—his greatest fear.
I wonder if Merkel is thinking the same? What if her nemesis, Hollande, is elected? Putin on one side and Hollande on the other. It is true Germany has been establishing closer ties with both Russia and China and now your article on her solidifying her allies behind the scenes...….mmmmm. She may have more foresight then many in the EU think.
http://images.wikia.com/turtledove/images/9/9e/OttovonBismarck.jpg
My bet is that all this is political posturing. The main game is making all western nations totally dependent on debt (non) money, which then will be jerked out from under everyone in one giant cluster event after which TPTB will scoop up everything left that is private, and will appear to be the saviors by implementing the new world order.
Is Merkel hitler's daughter or is that just conspiracy crap?
she looks like it , doesn't she? but more pertinent questions are;
1) how did she get there?
2) what is she doing there?
3) whom or what does she serve?
Merkel is surprisingly non socialist as someone left of center from american standards.
She is the kind of leftist (from an american viewpoint) that i ould support if there were no right of center or viable libertarian alternative.
They actually started cutting off benies for people who refuse to take a job offered them. I am in love with merkel and would fuck the shit out of her if she asked.
Are you kidding? I wouldn't fuck her with Lagarde's dick
I don't know, there is something sexy about a woman who could probably kick my ass...
Hugo, I read and usually agree with your post either fully or partially. You however have crossed the line, consigning your little fella to such a deplorable act with whom a donkey would bolt. Have you no conscience man? Milestones