The Eurozone Con Game Just Keeps Cracking

Wolf Richter's picture

Wolf Richter

“European leaders have not been able to meet their responsibilities,” French Prime Minister Jean-Marc Ayrault said about Germany and some other countries that are reluctant to pile more taxpayer money on Greece, whose economy is grinding to a halt, and whose government, deprived of the flow of bailout funds and cut off from the financial markets, can no longer fulfill its promises.

And Greeks are leery of new “structural reforms” currently fought over by the coalition government. They oppose more cuts in salaries, pensions, and health care. On Wednesday, they will attempt to bring the economy to a halt with a general strike and demonstrations in Athens and Thessaloniki. Meanwhile, Germany and other countries are wondering how Greece can possibly “reform” if the government can’t agree on the reforms to inflict on its people, and if the people aren’t willing to suffer them.

To his French compatriots, Ayrault defended the Fiscal Union treaty, which, after having been silenced to death, has come under blistering attack from the far right and the far left ahead of the parliamentary debate. They’re clamoring for a referendum, something the government wants to avoid at all costs—the people might well kill it, as they’d killed the European Constitution in the referendum of 2005 [read.... A French Rebellion Against Unelected Bureaucrats: “European Coup D’Etat And Rape Of Democracy”].

“This treaty doesn’t damage the budgetary sovereignty of parliament,” he said. “There is no transfer of sovereignty.” THE issue with that treaty. Even the German Constitutional Court acknowledged that it transferred sovereignty to the European Union. “There must be much more,” Ayrault told his listeners. “The reorientation of Europe” would continue, he said. “Europe is a combat.”

Indeed. A melee broke out in Madrid on Tuesday between protesters trying to occupy Parliament and riot police with batons. In Barcelona, Artur Mas, President of the Catalan government, announced that he’d hold early election on November 25 to initiate Catalonia’s path to “self-determination.” Another blow to the central government, which strongly opposes the early elections and categorically opposes any form of independence by Catalonia. Political turmoil just when Spain is teetering near the financial abyss [read.... Catalonia Cries for Independence, Spain Might Break Apart, And Its Military Threatens To “Crush” The “Vultures”].

The same day, ECB President Mario Draghi headed to Berlin for a charm offensive. His meeting with Chancellor Angela Merkel focused on “the economic and monetary union” and on preparations for the next EU summit in October, the 22nd such summit to solve the debt crisis once and for all. Then at the Conference of German Industry, he defended his plan to purchase “unlimited” amounts of government bonds from countries like Spain and Italy. There was really no alternative to his program, he said.

Alas, rumors began swirling around that legal experts at the Bundesbank have been vivisecting every syllable of the EU treaties that govern the ECB to determine the amount and duration beyond which these purchases might violate the treaties. Apparently, the Bundesbank, which has vigorously opposed Draghi’s plan, is preparing for a complaint before the European Court of Justice.

Still, Draghi patted himself on the back. “The Eurozone makes progress, investors acknowledge it,” he told about 1,000 managers. The ECB had succeeded in rebuilding confidence, he said.

Yet, confidence is in short supply among the very managers he was talking to. The Ifo Business Climate Index fell for the fifth month in a row. Particularly hard hit were expectations for the next six months which dropped to a level not seen since mid-2009, when the Federal Republic was emerging from the worst GDP collapse in its history.

Part of the problem: German industry has been highly skeptical of the bond-buying program, declared Hans-Peter Keitel, President of the Association of German Industry (BDI). He warned against relying on the ECB to deal with the debt crisis—thus fully backing Bundesbank President Jens Weidmann. Politicians should use the ESM bailout fund and structural reforms, he said, though the ECB’s printing press would be the “seemingly more comfortable path.”

So, to use the words of the French Prime Minster Ayrault, what are the “responsibilities” of the “European leaders?” Bailing out banks. Particularly German and French banks whose basements are full of decomposing paper from periphery countries. And bailing out investors of all stripes. Certainly, no one has yet bailed out the Greeks themselves, those who’ve lost their jobs or had their salaries cut. They don’t figure into the equation when politicians and unelected bureaucrats plot their next moves.

Jan Bennink, a columnist and self-described anti-EU populist, muses: “guys like me, who make films, sing songs, and publish stuff, suddenly have a lot to worry about from those grey mice in Brussels with their newspeak and absolute power.” And he wonders, “Is there anything more frightening than bureaucrats with a dream?” For his fantastic and troubling article, read.... The New Great Dictators Are Gaining Momentum In Europe.

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Grand Supercycle's picture


Due to recent central bank intervention and short covering spikes, these daily charts are extremely overextended and significant correction expected very soon:


shovelhead's picture

Tune in tomorrow for another exciting episode of "Euro...Cesspool of Despair".

SAT 800's picture

No shit, bro. I like the part about the Spanish Military "crushing the vultures"; would they have to take the train to Brussels to do this vulture crushing? Do they need any volunteer Snipers?

Shevva's picture

First the EU/US socialise their societies by handing out free gold to anyone with a wart or a kid.


The gold runs out but the people keep demanding gold or else they will vote you out at the next election.


Not wanting to lose power the leaders send the police -> riot police -> soldiers out onto the streets to keep the peace.



LawsofPhysics's picture

Not quite dipshit.  The politicians are puppets  the real power is behind the scenes.  Fascism is when that real power buys your representation so that they can keep their failed business models and failed businesses from going broke by stealing from the taxpayer via bailouts, inflation, and taxation.

By the time you see riot police it is far too late.  If the greek people were smart they would start killing some "elites" and bankers while all the police are distracted by the riots.

slaughterer's picture

Wolf, I like your work.  I need to change the channel: after 4 years the "Euro Crisis" season 4 is starting to repeat some of the same plot lines.  Plus, some of the best actors have been written out of the script.  I will return as viewer when they change the leading lady and leading man.  

SAT 800's picture

really? I was just going to get in a supply of popcorn. I think it's pretty funny. Dont; have any problems? create a super-government with a super bank in Belgium; world center for compassionate wisdom. Another whole layer of burecrats; what a clever idea. How could it possibly go wrong?

Peter Pan's picture

Personally I think some betting agency should be setting odds on the survival of the Euro. The winners of course should be paid in gold and or silver because it is not clear which other currencies will also bite the dust.

It is clear however that the continued defence and survival of the Euro will only lead to more poverty, uncertainty, instability and economic chaos.

Draghi, Merkel, Monti and Hollande belong in Madamme Tussaud's museum not as wax replicas but as stuffed dummies.

bank guy in Brussels's picture

Plenty of betting available on whether the euro will survive or not ... you can place your real money gambling bets, take yer chances

Zerohedge has covered this already too:

oilmilloilpress's picture

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Colonel Klink's picture

To quote Governor Weatherby Swann from Pirates of the Caribbean about Jack Sparrow....

Hang him!

Haus-Targaryen's picture

The political will is strong in this one . . . 

Poor Grogman's picture


A strike by central bankers wanting shorter hours and more pay is unlikely this week.

steve from virginia's picture


The Europeans ... People throwing buckets of water into the sinking ship!



SAT 800's picture

Yeah, t he dummies; if they just drilled a few more holes in it, the water would come in all by itself; save a lot of work. How is that to figure out; sheesh.

CompassionateFascist's picture

Greece and Spain disintegrating. Then Italy. Then France. Only Germany will be left standing. Europe will then agree to Germany's terms, or there will be no more Europe. Excellent. Roll over in your grave, Churchill. 

Junior Prepper's picture

No, Germany will fall apart all the same. When the Spanish/Italian bubbles burst, a lot of German wealth will be gone. There will be riots there, too. But the Germans will be more unprepared, because they think they are doing well, what with all the paper claims they are accumulating.

Non Passaran's picture

Not necessarily so.
Personally I own PM's but I wouldn't be surprised if the argument that the German government could simply print money equivalent to all debts owned to Germany from Taget2 and other eurozone stuff and give that money (as DEM, for example) to its citizens - had some truth in it.
As long as they can prevent non-local euros be exchanged for the new DEM, they may be able to simply print to make up for those debts.
Would such money be inherently worthless? Yes. Just like the current money.

Peter Pan's picture

Spot on junior. In fact this is the illusion that many financial asset holders labour under....the belief that the pieces of paper they hold are in fact worth something. They are worth zilch when the fat lady sings and right now believe me, she is gargling and ready to go.

apberusdisvet's picture

It's always been about unelected technocrats ruling Europe and raping the masses under a Fascist kleptocracy.  Ever since the first Rothschild got an erection from printing money out of thin air, and profiting from the endless wars, taking both sides of the action.  It's been incrementally planned for 300 years, but ramped up considerably since 9/11 when they figured that if the neocons could get away with the most successful move into fascism (to protect us against the terrorists, of course), then the CITY had to move fast.


Peter Pan's picture

If the Rothschilds got an erection from printing money, then Bernanke must be ready to poll vault after HIS money printing efforts.

john39's picture

life without bankers?  unthinkable!!!    but in a good way....

q99x2's picture

If the bankers think they can take over Europe without a physical military war they have another thought coming. They should get out while they still can. Hope whatever happens that it will be peaceful. Bitcoin and referendums. Who needs the Eurozone politicians or the bankster's money? No one.

ChanceIs's picture

"Fight Club" full video is now up (for free) on YouTube:

What a hoot.  Was up until 3:00 last night.  It is all so clear now.

Pharming's picture

Ahhh...yes, what ever happens will be peaceful, kind of like yesterday in Spain.  Quiet peaceful protests.  Except for the occasional crack of a skull under a wooden baton, and of course that whizzing sound of "rubber" bullets buzzing around like runaway bottle rockets from a tipped over Falstaff bottle on the fourth of July....    Yeah...peaceful...ahhhh....

sink critically's picture

Globalists the world over should know better than the rest of us that there is no place to hide. If they are expecting to leave earth's atmosphere then they are the greatest fools bar none.