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Could Merkel Pull the Plug on the Euro?

Phoenix Capital Research's picture





 

 

Back in 2011, I predicted that when push ultimately came to shove, Germany would leave the Euro before it picked up the full tab. The reasoning is simple: the Germany population will not stand for rampant monetization. They know how that ends (Weimar) and they will kick out any politician who seems to support the idea.

 

German Chancellor Angela Merkel has walked a tightrope over the last few years of keeping the EU together without infuriating the German populace to the point of having to abandon ship.

 

To do this, Merkel has maintained a firm stance of “we’ll write the check provided conditions are met” much as a parent would give a child his or her allowance provided the child performed its chores satisfactorily. In the case of Germany, the “chores” are required conditions of austerity measures and budgetary requirements in exchange for bailout funds.

 

By doing this, Merkel is able to play hardball on an economic front (having failed to meet its German-required financial targets Greece had to wait an additional six months to receive another installment of its Second bailout) without appear too hard-nosed on a political front (she continually pushes to keep the Euro together, expressing a willingness to help other nations… as long as they meet her budgetary requirements).

 

The policy has thus far been a success with Merkel’s approval rating soaring to its highest level since 2009 (before her re-election bid). However, her political party has begun to realize that there will be consequences for defending the Euro no matter what the cost, suffering an unexpected defeat in January of this year.

 

Germany's center-left opposition won a wafer-thin victory over Chancellor Angela Merkel's coalition in a major state election Sunday, dealing a setback as she seeks a third term at the helm of Europe's biggest economy later this year.

 

The opposition Social Democrats and Greens won a single-seat majority in the state legislature in Lower Saxony, ousting the coalition of Merkel's conservative Christian Democratic Union and the pro-market Free Democrats that has run the northwestern region for 10 years. The same parties form the national government.

 

The 58-year-old Merkel will seek another four-year term in a national parliamentary election expected in September. She and her party are riding high in national polls, but the opposition hoped the Lower Saxony vote would show she is vulnerable.

 

The outcome could boost what so far has been a sputtering campaign by Merkel's Social Democratic challenger, Peer Steinbrueck.

 

"This evening gives us real tailwind for the national election," said Katrin Goering-Eckardt, a leader of Steinbrueck's allies, the Greens. "We can and will manage to replace the (center-right) coalition."

 

However, the close outcome also underscores the possibility of a messy result in September, with no clear winner.

 

http://bigstory.ap.org/article/merkel-risks-election-year-setback-state-vote

 

Merkel is up for re-election this year. So she will be more attentive to voter needs than usual. With that in mind, the following news story doesn’t bode well for her and her pro-Euro policies:

 

One in four Germans would be ready to vote in September's federal election for a party that wants to quit the euro, according to an opinion poll published on Monday that highlights German unease over the costs of the euro zone crisis.

 

Germany's mainstream parties remain solidly pro-euro despite grumbling over bailouts of countries such as Greece. A German taboo on nationalism, rooted in atonement for the crimes of the Nazi era, has helped to muffle eurosceptic voices.

 

But the poll conducted by TNS-Emnid for the weekly Focus magazine showed 26 percent of Germans would consider backing a party that wanted to take Germany out of the euro and as many as four in 10 Germans in the 40-49 age bracket would do so.

 

"This suggests there may be potential here for a new protest party," Emnid chief Klaus Peter Schoeppner told Focus.

 

http://www.reuters.com/article/2013/03/11/us-germany-eurosceptics-idUSBRE92A07F20130311

 

This is a MAJOR trend to watch. If the German population begins to swing more in favor of leaving Euro, to the extent that it could cost Merkel her re-election, then my 2011 prediction could indeed begin to become a reality.

 

Smart investors are taking advantage of the lull in action to position themselves accordingly. On that note, if you’ve yet to prepare for Europe’s BIG collapse…we’ve recently published a report showing investors how to prepare for this. It’s called What Europe’s Collapse Means For You and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.

 

This report is 100% FREE. You can pick up a copy today at:

 

http://gainspainscapital.com/eu-report/

 

Best Regards,

Graham Summers

 

PS. We also offer a FREE Special Report detailing the threat of inflation as well as two investments that will explode higher as it seeps throughout the financial system. You can pick up a copy of this report at:

http://gainspainscapital.com/gpc-inflation/

 

 

 

 

 

 

 


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Mon, 03/11/2013 - 16:11 | Link to Comment Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

PIGS fuelled and ready for takeoff!!!!!

Mon, 03/11/2013 - 16:10 | Link to Comment debtor of last ...
debtor of last resort's picture

With a little luck, DB will pull the plug. When big daddy 'must' be saved, i wonder what the public will think. AfD.

Mon, 03/11/2013 - 13:57 | Link to Comment Par Contre
Par Contre's picture

 

Germans Seeking Euro Exit Forming New Political Party

http://forexblog.oanda.com/20130310/germans-seeking-euro-exit-forming-ne...

 

Mon, 03/11/2013 - 13:53 | Link to Comment Big Corked Boots
Big Corked Boots's picture

Buy my shit! Buy my shit! Buy my shit!

Mon, 03/11/2013 - 13:45 | Link to Comment paint it red ca...
paint it red call it hell's picture

The situation may never have been better for Germany to let brussels dangle but,

"Could Merkel Pull the Plug on the Euro?"

not friggin likely. Merkle may have to go along but her role is not that of nationalist savior.

Mon, 03/11/2013 - 13:37 | Link to Comment Kastorsky
Kastorsky's picture

Graham bearish euro - go long euro. 

100% win.


Mon, 03/11/2013 - 13:29 | Link to Comment sunny
sunny's picture

Merkel will leave the euro when pigs fly.

sunny

Mon, 03/11/2013 - 16:01 | Link to Comment Rustysilver
Rustysilver's picture

Sunny,

How about when pigs float down the river: some country in Asia.

Mon, 03/11/2013 - 13:28 | Link to Comment tony bonn
tony bonn's picture

graham - i believe that you are misreading the tea leaves. i will grant that a growing and large percentage of germans are not fond of the euro and playing sugar daddy to profligate whores....but merkel is a dyed in the wool globalist and will do absolutely nothing to upend the euro or the european common market....she is a wolf in sheep's clothing.....germany sees the european union as a springboard for regional domination - it has not met a crisis it didn't like.

you need to pay attention to actions instead of words....that is the only thing that counts....merkel could declare the european union dead and a total failure, but unless she and her globalist whore government withdrew - and that includes the legislature and courts - her pronouncements mean absolutely nothing.....

Mon, 03/11/2013 - 13:24 | Link to Comment Sandmann
Sandmann's picture

Steinbrueck is one of Johannes Rau's coterie and in the NRW Mafia that ran a totally corrupt state with its WestLB connection. It is simply amazing how they found Hans Eichel a job as Finance Minister after he lost the Hesse Election in 1999 and then replaced him with Peer Steinbrueck when he lost the NRW Election in 2005. it is fantastic how the SPD found TWO rejected politicians new jobs screwing up German public finances

Mon, 03/11/2013 - 13:41 | Link to Comment Haus-Targaryen
Haus-Targaryen's picture

Their SPD - its part of their job description.  Could always be worse.  Die Grune wants 5€ je Litre gas and a 120 kph speedlimit on the Autobahn. 

 

Seriously, die Grune is probably the most dangerous political force on the world's stage. I'd rather have the Communists or good ol' Adolf running the show himself than see these people in power.

Mon, 03/11/2013 - 14:12 | Link to Comment Brit_Abroad
Brit_Abroad's picture

Yes, I totally agree. Fuck the Ökofaschisten !!!

Mon, 03/11/2013 - 15:39 | Link to Comment Haus-Targaryen
Haus-Targaryen's picture

For those of you who don't read German, Ökofaschisten means Eco-fascists. 

Mon, 03/11/2013 - 13:19 | Link to Comment The Trade Group
The Trade Group's picture

Graham Summers you suck! Your predictions are consistently wrong... ( I noticed you stopped putting dates on your predictions so that it is harder to point out your incompetence). Now you just spew out endless predictions of doom and gloom for which sooner or later, you will be right... There is NO VALUE in that you gutless coward. Why even post at all...

Mon, 03/11/2013 - 13:06 | Link to Comment Jack Sheet
Jack Sheet's picture

More pseudo-analysis from a complete f***ing ignoramus.

Your predictions aren't worth the fart I just emitted.

Mon, 03/11/2013 - 13:00 | Link to Comment ubjay
ubjay's picture

I´ll have a beer on you when your prediction turns to be a true one.

Mon, 03/11/2013 - 12:56 | Link to Comment Ghordius
Ghordius's picture

Graham, according to your predictions Germany should have left... last year? I note you use the same Reuters story with one select age group and 40%

pardon me, but isn't now an election year where the CDU/CSU is facing the SPD as main contender? how euro-sceptic is the German Left?

Mon, 03/11/2013 - 16:07 | Link to Comment Buck Johnson
Buck Johnson's picture

Germany can't leave the Euro because one they will be blamed for it falling and two, alot of their banks have toxic debt and derivatives that are tied to many of these countries.

Mon, 03/11/2013 - 13:01 | Link to Comment Haus-Targaryen
Haus-Targaryen's picture

The left in Germany loves the Euro.  Steinbrück, the SPD Chancellor candidate has openly advocated for EuroBonds, and told the German population at the onset of the crisis that Germany should look at the Euro crisis' financial situation the same EXACT way as it did the reunification in 91.

 

Merkel is sadly the lesser of two evils, and I can only hope that AfD can gain traction and pull her father to the right on Europe.

 

<>

Mon, 03/11/2013 - 13:23 | Link to Comment walküre
walküre's picture

There is no alternative choice when it comes to voting for or against the EU, the Euro or Germany's involvement.

At least the people were able to vote FOR Hitler and the NSDAP when they had the choice. There haven't been honest or authentic elections in Germany (East and West or combined) since 1933.

Abandoning the Euro and putting the EU DIKTAT in its place would be considered a radical political move. The people would welcome a radical solution and probably vote FOR any radical party or politician offering a silver lining. The mainstream establishment and the elite would make sure that any such political movement would be classified and referred to as "radical" hence austersizing the movement in the process.

Germans need to grow some balls. Nobody is advocating to conquer Europe or put any EU lovers and Euro whores into death camps when they reasonably argue that the common currency is clearly NOT working as it was advertised. Subsequently neither Germans nor any other Europeans are going to make anymore concessions in regards to a closer union with an even bigger bureaucracy and oversight.

The issue is a dead horse. Bury it already.

Mon, 03/11/2013 - 13:37 | Link to Comment Haus-Targaryen
Haus-Targaryen's picture

I don't think this party is going to amount to much of anything.  Germans have a long long long long history of not doing much of anything until there is a HUGE FREAKING CRISIS at their door step. 

You'll have oodels of idiots voting for the Grune, Linke, und SPD soweit die Piraten und die Kommunisten, and that won't change until retirements start to evaporate, and people start to lose their houses, and there is no future of the kids here.  Then the Germans have another very long long long long history, and that is taking over the contient to stimulate their economy. 

While I don't think the Germans are keen on taking over ClubMED again given the outrageous costs associated with keeping these latin morons happy, I do think that the German high leadership of all parties is has so indoctrinated with this EU rubbish that the AfD should not advertise itself as the UKIP of Germany, but the 21st century Operation Valkerie.  We can only hope they succeed this time, and if not, most assuradly Germany will be (economically and politically) destroyed again.

That being said -- I think that in September the main focus of this party is going to be pulling the FDP/CDU/CSU to the right on Europe, and not giving Draghi a wink and a node to "do what must be done" aka monetization. However, unless they can find a charasmatic leader, who is a fantastic public speaker and who can get large crowds excided who can also articulate his or her points very well, I don't seem them making it over the 5% threshold unless the FDP completely collapses into the AfD. 

Mon, 03/11/2013 - 13:52 | Link to Comment walküre
walküre's picture

Piraten are finished. The one hit wonder is a goner. What their purpose was and who financed these clowns to get as much attention as they did is a real mystery. I think there might be a conspiracy there somewhere because Piraten took the stage, front and center and got alot of media attention. Money have had to be paid somewhere to someone. Were they financed to prevent another party from getting attention at the same time? FDP is in bad shape. Plagued by scandals and frustration. The elite seems to be hell bent on keeping the Euro in place. And why not? It's benefited the elite in a terrific way.

AfD has their first convention in Oberursel near Frankfurt. They should have chosen the Paulskirche in Frankfurt instead. Maybe I'm a hopeless romantic dreamer of virtues and freedoms but I think this movement will gain traction and have legs quickly.

Mon, 03/11/2013 - 14:08 | Link to Comment Haus-Targaryen
Haus-Targaryen's picture

Wir beide können nur Hoffnung haben.

Mon, 03/11/2013 - 15:32 | Link to Comment walküre
walküre's picture

Die Hoffnung stirbt zuletzt

Mon, 03/11/2013 - 13:09 | Link to Comment Ghordius
Ghordius's picture

oh Steinbrück The Charming - my least favourite German politician... ever - and I'm going back to Charlemain in this assessment

I do seriously hope that this AfD gains traction - at least it would finally start some serious discussion on the EUR in Germany - up to now it's only "we'll pay for this, because you know, we did WWII blablabla"

nevertheless, when it comes to currency, most people just start to sleep after the second sentence. currency seems to be the most boring of all things, for most

Mon, 03/11/2013 - 14:31 | Link to Comment falak pema
falak pema's picture

who is Schroeder's political son in SPD is it Stein B? 

Mon, 03/11/2013 - 16:04 | Link to Comment Fuh Querada
Fuh Querada's picture

Schroder buggered off to Gazprom and took his progeny with him.

Mon, 03/11/2013 - 13:15 | Link to Comment Haus-Targaryen
Haus-Targaryen's picture

Steinbrück is my 3rd least favorite German politician behind

 

1) Whichever idiot is running the Green Party

2) Whichever idiot is running die Linke

3) Steinbrück

4) Köhl

5) Everyone's favorite Austrian

Mon, 03/11/2013 - 16:09 | Link to Comment medium giraffe
medium giraffe's picture

Ahhhh Helmut.  I remember him well.  What an asshole.

Mon, 03/11/2013 - 13:08 | Link to Comment Freddie
Freddie's picture

Steinbruck is a real POS.  He attacked Grillo and Berlusconi.  Steinbruck never had a real job and has been a politicians his entire life.  Typical politician scum.

 

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