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Bailout Rebellion in Germany Heats Up
For the first time ever, a clear majority (60%) of Germans no longer sees any benefits to being part of the Eurozone, given all the risks, according to a poll published September 16 (FAZ, article in German). In the age group 45 to 54, it jumps to 67%. And 66% reject aiding Greece and other heavily indebted countries. Ominously for Chancellor Angela Merkel, 82% believe that her government's crisis management is bad, and 83% complain that they're kept in the dark about the politics of the euro crisis.
"There cannot be any prohibition to think" just so that the euro can be stabilized, wrote Philipp Rösler, Minister of Economics and Technology, in a commentary published on September 9 (Welt, article in German). "And the orderly default of Greece is part of that," he added. Instantly, all hell broke loose, and Denkverbot (prohibition to think) became a rallying cry against the onslaught of criticism that his remarks engendered.
Even Timothy Geithner, who attended the meeting of European finance ministers in Poland, fired off a broadside in Rösler's direction. In the same breath, he proposed the expansion—through leverage, of all things—of the European bailout mechanism, the EFSF. According to Austrian Finance Minister, Maria Fekter, who witnessed the scene, he warned of "catastrophic" economic risks due to the disputes among the countries of the Eurozone and due to the conflicts between these countries and the ECB. Then he demanded in dramatic terms, she said, that "we grab money with our hands to stabilize the banks and expand the EFSF unconditionally."
The smack-down was immediate. German Finance Minister, Wolfgang Schäuble, took Geithner to task and explained to him in no uncertain terms, according to Fekter, that it was not possible to burden the taxpayers to that extent, particularly not if only the taxpayers of Triple-A countries were to be burdened. A bailout "with tax money alone in the quantity that the USA imagines will not be feasible," Schäuble said. (Wiener Zeitung, article in German).
Vocal support for Rösler came today from a group of 16 prominent German economists. If the government in its efforts to stabilize the euro didn't consider the insolvency of a member country, they warned, Germany would become subject to endless extortion (FAZ, article in German). And to impose a Denkverbot concerning it would be a step back into "top-down state thinking." They further lamented that these policies would turn the Eurozone into a transfer union. If the government wanted to establish a transfer union, it should discuss that with the German voters, they demanded, because it would be a fundamental change in the E.U. constitution and should be legitimized by vote. Otherwise, Germany would be "threatened by a populist movement to exit the E.U."
Meanwhile, on his visit to Rome, Rösler had to face down Italian Finance Minister, Giulio Tremonti, who'd "vehemently" demanded the creation of Eurobonds, sources of the German delegation said (Zeit, article in German). President of the European Commission, José Manuel Barroso, supported Tremonti's demands. But Rösler, like Merkel and others, rejected the idea. Transferring liabilities to other countries would remove pressure from debtor nations to reform, he said, differences in yields being a market-driven incentive to get the budget in order. Eurobonds are also legally impossible, he added, based on a recent decision by the German Federal Constitutional Court.
Eurozone must be honest: Big haircuts for bond holders, debt limits for all, says Die Zeit (article in German). The drama of saving European banks that hold Greek debt, and the debt of other tottering Eurozone nations, has been going on for a year and a half. Each effort to keep Greece on track follows the familiar script. Politicians promise spending cuts. Greeks demonstrate. E.U. inspectors check things out and leave angry. Germans declare that Greece will not get any relief until it fixes its problems. Then Greece notices that it needs yet more money and threatens to default. Germany nods. And the next installment gets paid.
By now, all hope for a happy ending has dissipated. Greece is suffering from a multitude of problems that defy quick fixes, among them a huge pile of debt, an inept and corrupt fiscal system where taxes are simply not collected, dysfunctional institutions, and a government-dominated economy. Even unlimited amounts of money can only defer the end game.
But there are already victims. The most recent one: The concept of an independent, apolitical central bank whose primary purpose is guarding the value of the currency, rather than monetizing the debt of countries that have spent beyond their means.
To see how it all started, read my first post on the Bailout Rebellion in Germany
Wolf Richter - www.testosteronepit.com
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can't believe it but,
GO GERMANY GO
if you go TARP you gonna get FARK'D
I hopped on this thread to say exactly that; bailouts will proceed. Popular opinion doesn't matter. Back in the heated days before TARP passed, NPR (of all news outlets) reported that OPOSITION to TARP was rolling into congressional offices at 99:1 against (there was an anti-fax/anti-callin campaign going - I was reading MISH back then who covered it well). TARP passed and the media choked it down like Jayda Diamonde as if it was nothing (HatTip WhenGeniusPrevailed).
Folks, the peons will have representation when almost everyone of these bastards (electorally) decorate lamp posts in DC like ornaments at Christmas. Until then, its bail outs, money printing, and eventual martial law/WWIII to maintain status quo. The gold standard only comes after the blood has been spilled and the world is ... well ... smaller.
But I have lost faith in an outcome more rosy. So don't listen to me.
Regards,
Cooter
The only we have bailouts to begin with is because of you. Now start your revolution by having someone else pay for it!
Yeah Cooter,
You are correct-----------we are the losers of last resort----that´s how capitalism survives---why it is such a perfect system for the US. Each of us thinks he is so special that the rules don´t apply.
But maybe, this ONE TIME ONLY---it will be different, no?
This oldman does not think so om
OM... You're dead wrong. This time is really going to be different. The fundamentals are in place to destroy the world financial system... and the trend is worsening daily.
The only solution left to central banks is to print, and that is a solution for a bigger disaster as each day passes. Management of perception by manipulation of all asset classes is about to hit the wall.
You are about to see things that you never thought you would see. Mr Market always wins in the end.
whipsnae,
I´m always dead-wrong; so what? I´m just so tired of listening to fear write its shit all over this page.
Who gives a fuck if the system fails or passes? It is still the only system that we have devised----remember mercantilism(spelling? I forget things)? When is a new idea going to appear that is not terrifying to us in the US?
Shit, I apologize for having written such a challeging comment-please accept my apology---of course, I´m dead wrong---mark it on your calendar
respectfully om
Or they pull off a stick save and move us onto a gold related standard, thereby dismantling the old system that cannot be saved. If they succeed, TPTB get a firmer grip on the world, but we don't have overwhelming chaos. If they fail, bad things happen everywhere. Either way, we are in for trouble.
<<Transferring liabilities to other countries would remove pressure from debtor nations to reform, he said, differences in yields being a market-driven incentive to get the budget in order>>
Acht du Lieber!
Bailout rebellion, really? The self proclaimed american-poodled german elite is doing a lot of blahblah in their boring elite-run newspapers and talkshows. Is the average person interested in all that fuzz? Not really, the average german is mostly unnerved by all that Greece and €uro bullshit. The problem is that there is no crisis around here, not even in Berlin, which is broke, has no industry, a tremendous lack of jobs and far too many of it's citizens on welfare. Many people do struggle with their low income, yes, but real poverty is not a mass issue, not at all, and in the southern lands of Germany one get's into severe trouble finding *any* signs of crisis at all except the hysteria of the media propaganda which does nothing but driving people into ignore-mode and anger born of fear for their well-filled wallets and bank-accounts. As long as people can afford to pay 720000€ for a 130 square meter bungalow built in 1958 in need of renovation with 1600 square meters of ground around that small house in an absolute non-important small village near the Rhine things can not be that bad.
Day-to-day reality in Germany does not fit in the global crisis hysteria.
All one can read here (which is an essential neccesity these days!) seems as if it would be located on another planet when comparing it with everyday life in Germany.
OK, so now we know that China AND Germany are not going to escape this global event, but it makes for good show.
As I type this CNN announces on the tube:
Yeah, sure.
Don't force me to refuel my old Panther tank.
"All one can read here (which is an essential neccesity these days!) seems as if it would be located on another planet when comparing it with everyday life in Germany."
That's also my impression. As if Germany was not part of the world. It seems to be more self-centered than other countries I visited. An example of this behaviour was given after the Fukushima incident.
Why do you say that Germany acted in a very self-centred manner after Fukushima? It seems to me they were the only nation where the politicians did not try to downplay the severity of the situation (unlike France, UK, USA for example), even though this created a big boost for the Green Party and as a consequence, hurt the CDU/ FDP coalition.
The Germans are struggling to realize the extent of the lies of their currency partners. They are struggling to realize that the banking industry, not just abroad but in Germany as well, is nothing but one big confidence trick. I suppose it is the legacy of the last century, but Germans find it hard to tell other nations what to do - they keep making suggestions to Greece, who nod, then turn and laugh.
However, one thing I notice from discussions with German financiers is how the US continues to get away with the fact its economy is in almost terminal decline. I think Geithner may have pushed his luck too far giving advice to the Euro nations, when they have tried to be very respectful in public comments they make about the US.
It was more a feeling. Maybe I am wrong. I was never a fan of nuclear energy. So don't get the wrong impression. I was just fascinated to watch how quick the Fukushima incident disappeared in the News and was replaced by a national discussion about nuclear energy.
And with self-centered - I mean the public discourse (media), not the average German. I agree with jhm on this. It's like living on a different planet sometimes and I think that with the exemption of Der Spiegel, German news coverage is not very good.
Who gives a fuck what the German people want. Like THAT fucking matters when it comes to bankers and their bonuses. DIdn't they see what happened over here?? We had 100-to-1 against tarp. And? They are about to get TEABAGGED with some euro-tarp bailout bullshit. Gauran-fuckin-teed. And the best part is that they will be told "it's good for them".
Da OmbamaNation sent Timmy to cram a load of euro-tarp bailout bullshit down there throats. Gauran-fuckin-teed. And the telling part is they were told "it's good for them".
There, corrected that for ya.
<P>
What if anything you have written has a relationship with the Tea Party?
The Tea Party does not support private gains and social losses. The Tea Party is a response to Washington corruption and crony capitalism.
The Tea Party stands with the Constitution of the United States as written not as interpreted by teleprompter dependent, lowest GPA in his class, dim witted, unskilled, so called lawyer and his national socialist loving fascist supporters, B. Hussein Obama, aka biological offspring of Frank Marshall Davis!</p>
fx... The Tea Party is PART of crony capitalism. Once the Tea Party found out that cutting gov spending meant cutting their socialized SS, Medicare, food stamps, etc, they changed their tune.
The Tea Party stands for the Constitution? Where in the constitution is provision made for a socialist state? Where in the Constitution is there provisions for Social Security, Medicare, food stamps, and a million other money transfer programs? Nowhere!
Cutting gov spending was OK till it meant cutting the Tea Partiers social benefits... They are so dumb that they thought their SS/Medicare benefits were manna from heaven. Duh...
Tea Party = Sack Of Hammers
The Tea Party is PART of crony capitalism.
Who is the leader of the Tea Party?
At the sound of the bugle the Tea party will fall into line. They can't wait to stop thinking and start marching.
Do ya hear that? It's the sound of productive people going on strike until the people riding in the wagon get out and start pushing, even if it's with their Social Security-funded Hover-rounds™!
Speak For Yourself. The Tea Party is everyman, & everyman has had it up to 'here' with the politikal/banker elitist manipulations taking place in open view.
Whether they can do anything is a whole 'nuther matter.
That's the difference between a smaller state like Germany and the US. The German people actually matter. Germans are closer to the government and don't let lobbyists have free reign.
That's how they have socialized health care, unions and general welfare for their population. And fewer per capita BILLIONAIRES.
nice mouth
It looks like the euro zone is doomed. It is only a short matter of time. When Greece goes under, it is going to take the global finance network with it. The only reason that it has not gone down already is because the banksters are keeping the door open as long as possible so that their cronys can get out from underneath before the collapse. Germany needs to cut their losses and get the fuck out of the way-or else all Germans will suffer to a greater magnatude. All of this will eventually spread around the globe--yeah, you too China, no one is going to escape. The US will print more funny money-but that will eventually collapse under it's own weight as well. There are too many sheep and not enough sheep dogs--and the wolves are ravenous.
We all have fiat backed by nothing, so there is no safe fiat currency. Germany cannot escape this fact and retreat to sound financial policy in the middle of an unsound financial world. All of the debt being racked up to keep the party going isn't going to be paid, period. Therefore, everybody is racking up debt while acquiring gold, because in the end, that is the only thing that is going to support your citizens going forward. This is just a game while we swap the old wampum for the oldest and most respected token of wealth in the world, gold. When that begins, all debts are unwound, and all the old games come to an end, and a new game begins.
How many spear and horses you owe become irrelevant when we move to a tank standard.
Fiat debt is denominated in fiat. It becomes irrelevant when they change the measuring stick of wealth to gold.
8 empty tubes and it's Miller time. How long can this go on? Someone spare us from this continuing drama. The world needs you Euros to man up and get this over with so world can move on to the next drama. Spare us another week of this fiasco.
Oktoberfest has begun in Germany. The sheeple will never revolt as long as they have their tankards full.
Merkel is about to institute year round Oktoberfest for the sheeple.
8 empty tubes and it's Miller time. How long can this go on? Someone spare us from this continuing drama. The world needs you Euros to man up and get this over with so world can move on to the next drama. Spare us another week of this fiasco.
what
dup
What is the position of German banks relative to the PIGGS? Missing in this article is discussion of the financial impact on Germany of abandonment of the EU. If Germany can jump the EU ship, then debtor countries can as well. Doing so, they can default, returning to national currency. My suspicion being German banks hold substantial national bonds among the PIIGS, when, although interestingly more obscure than other European banks, my guess is German banks are as "leveraged" (get real, dump the euphemism and call it what it is: INDEBTED) as other banks in the Western world. If so, then the money supply in Germany should seriously shrink in short order, exacerbated by German obsession with inflation, which I only can conclude is inherited from the 1920s. This occurring, the German public can be expected to turn on a non job producing stimulous even quicker than the U.S. public has turned on Oh Bummer for the same reason. Neither is fascism nor Nazism going to alter the equation, as long as the "socialism" constituent of national socialism is excluded in the current neo-feudal environment. What may be heard is the kerchunk of Madam Guillotine, as politics reasserts its dominance over economics, and in a not particularly pleasant way for the Financial/Political class.
Nobody, NOBODY is leaving the EU without permission to do so. Otherwise, they would face the ire of the remaining members. What would life be like for any EU country if their trade was restricted by all of Europe (and the US)? This kick the can game is being orchestrated by the Fed and the ECB and they damn well intend to come out on top when this comes to an end. They will not let any country unilaterally bolt. They didn't spend trillions of worthless fiat to see everything fall apart and leave them powerless with nothing but useless fiat and unpayable debts.
As in Germany is being held hostage by rest?
Most important in your post is the comment, "What would life be like for any EU country if their trade was restricted by all of Europe . . . ?" A significant aspect of the EU is constitution as a contained trade zone. Within this trade zone is an oft ignored division of labor, especially by critics of Keynes. Germany is among the producer constituents of this division of labor. Production, however, is of no significance without a consumer constituent of this division of labor. Obsessed with some noble conception of production for its own sake, critics of the PIGGS overlook the populations of these countries compose the consumer constituent of the EU division of labor. Without their demand, German production is useless. All you, and the Germans, are doing is expressing a latent intrinsic valuation of production for its own sake. Paying no attention to its utilitarian value, all good critics of Keynes need have a discussion with environmental economists.
Sorry all you good neo-feudal faux "capitalists" out there, but the world is an interrelated whole. As Einstein observed,
"When forced to summarize the general theory of relativity in one sentence: Time and space and gravitation have no separate existence from matter. . . . Physical objects are not in space, but these objects are spatially extended. In this way the concept ‘empty space’ loses its meaning. . . . The particle can only appear as a limited region in space in which the field strength or the energy density are particularly high." [Albert Einstein, “On the Generalized Theory of Gravitation,” Scientific American, Volume 182, Number 4, April 1950.]
Dogging economics and finance is assumption of a deductive neo-Augustinian linearity assuming some primitive element from which all else deductively follows. There ain't no such thing. Richard Feynman puts this well observing,
"There are two kinds of ways of looking at mathematics. . . . the Babylonian tradition and the Greek tradition. . . . Euclid discovered that there was a way in which all the theorems of geometry could be ordered from a set of axioms that were particularly simple. . . . The Babylonian attitude. . . . is that you know all of the various theorems and many of the connections in between, but you have never fully realized that it could all come up from a bunch of axioms. . . . Even in mathematics you can start in different places. . . . In physics we need the Babylonian method, and not the Euclidian or Greek method." [Richard Feynman, The Character of Physical Law, 1965, Chapter 2, “The Relation of Mathematics to Physics,” http://www.cs.auckland.ac.nz/~chaitin/bonn.html.]
Substitute "economics" and "finance" for "physics," and a lot of the confusion in current "econo/financial" dispute will be alleviated. Simply put, there ain't no easy answer, 'cause what goes around, comes around.
The Germans saw their money go to zero three times in thirty years, between 1915 and 1945.
Good luck putting the Keynesian shell game over on them.
They don't get a vote. Well they do, but the vote they get is for worthless candidate A who will just do what the banksters want, or worthless candidate B who will do the same. This is a rape of every citizen in every nation of the world and they are just going to have to take it. They can riot, but the tanks will come out and the end result will be the same. The only escape is to do what the co-conspirators are doing, buying gold.
This may turn out to be quite the interesting weekend.
Which will be pretty much every short-lived weekend until the end of economic/monetary civilization as we know it.
But but but ... if there were elections to be held now in Germany, a majority would vote for the europhiles of SPD, Greens and communists. Ain't that funny? They'd get their hated transferunion delivered on a silver plate! The laughter then coming out of the PIIGS must be earsplitting. Besides, some think the whole eurocrisis is just a media hype, directed by WS and the City. The political crisis in DC will be baaaaaack in Nov. 2011, the financial as well. Enjoy reading :)
http://www.leap2020.eu/GEAB-N-57-is-available-Global-systemic-crisis-Fourth-quarter-2011-Implosive-fusion-of-global-financial-assets_a7640.html
A LEAP into the dark... The current central bank pump to avoid EUro liquidity dump, has a three month life line...So its wil get dark pretty fast unless Bernank and Triché's succesor have a plan. Looking at the Greek mess it doesn't look like it. Greece now becoming the fuse that has lit the Euro collapse, the two tier EU economy...OR the EU federation. It looks like Hungarian goulash to me all this gesticulation. But LEAP says its worse on the other side...We are in a game of the famous painting by George de la Tour "Le Tricheur de l'as de trèfle" or "the card players"...
http://upload.wikimedia.org/wikipedia/commons/d/d9/Georges_de_La_Tour_02...
Shouldn't that picture have dogs in it? As a side note I read the LEAP article, thanks it is thought provoking, but any denouement that does not include actions by America's military is sadly incomplete, I believe.
Not if the FDP splits from Merkel, forcing an election, and runs on a no-bailout platform.
And the banksters wouldn't use such a split to divert the public's attention and buy time? Don't forget, the banksters are not buying gold because they think they can save fiat. Everything they are doing is to buy time, and any political standoff would morph into a puppet show for the public to buy more time.
You think the FDP would have a great win?
California Public Employees and Retirees are holding their breath to see if Germany will come through for the Greek socialists. If the Germans will do it, the hope is that the US Federal govt. will bail out California's bankrupt public pensions.
Bail out with what, more paper fiat? What are they going to buy with it, more shit from China? Great.
Of course they will bail them out. All bailouts will go forward if they help the system to limp forward for another day.
California's constitution is phuqued up, any bailout will be very temporary. A constitution rendering taxation nearly impossible, while requiring every socially worthy good imaginable, is an impossible document. Let's face it, Californians have the behavioral character of a three year old. Being so, meeting their demands is impossibly short lived, as any parent of a three year old will verify. Oh, yeah, add in a government of incompetent boobs who facilitated the nightmare in California, and then complimented one another by naming freeway sections after one another. Reading the roster of California politicians sends shivers down one's spine, leaving little hope of personnel competence. Finally, factor in an unbelievably parochial public who still thinks California is the perceived heaven on earth of the post-WWII boom years. With a dysfunctional constitution, politicians having the mentality of executives of too big to fail American financial institutions, a public living in la-la-land, one only need reflect on 2008 to foresee the fate of California.
The exodus has already started. They will self destruct. There will not be enough taxpayers to bail them out even at 100% tax.
Time to turn the lights out.