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Bailout Rebellion In Germany
"We're on the way to a worldwide financial dictatorship governed by bankers," said Peter Gauweiler, German Bundestags Representative (CSU), in an interview published Monday in the Welt Online. "We don't support Greece," he said. "We support 25 or 30 worldwide investment banks and their insane activities."
Successful lawyer, he fought back in the German Supreme Court, claiming that the money-printing and bailout operations by the European Central Bank (ECB), and Germany's role in them, violate the constitution. The court's decision is expected on Wednesday. The foundation of the euro was the Stability Pact, he said—a contract that now has been broken. And he wonders if "the euro can still function as a value-retaining currency."
This, just as Wolfgang Schäuble, Finance Minister, has been dealt a defeat of sorts by his own governing coalition during the trial vote for the expansion of the current European Financial Stability Facility (EFSF) whose purpose it is to bail out an ever lager circle of debt-sinner countries. 25 members of his coalition voted against it or abstained. The actual vote is scheduled for September 29.
And the numbers are ugly. 89% of the population oppose the expansion of the EFSF and doubt that ever larger amounts will solve the debt crisis, according to a recent poll. 80% demand that parliament must agree each time before Germany can take on additional burdens and risks. And 85% demand that financial institutions, rather than taxpayer, take the first losses when a country defaults. What galls them is that they have to shoulder these risks and burdens so that debt-sinner countries can borrow even more at lower interest rates.
"The ECB's bond buying program was a mistake," laments Hans-Werner Sinn, President of Ifo Institute for Economic Research. Opening the money spigot removed the incentives for the affected countries to undergo needed budgetary and structural reforms. He holds up as proof Italy's currents effort to weasel out of budget cuts and tax increases and Greece's resistance to reform.
"It would be a lot cheaper for German taxpayers" if Greece exited the eurozone, said Hermann Otto Solms, financial expert of the FDP, the government's coalition partner, in an interview in the Südwest Presse. Greece has violated repeatedly the condition for the aid package, and "in the long run, that cannot be permitted." Otherwise, the system of mutual support will lose credibility, and other countries will be tempted to manage their own budgets at the expense of stronger countries. Of course, Greece's debt would have to be restructured, and banks may have to be bailed out again, just like after Lehman, but it would cost less than endless support. Greece would also be better off. It would get rid of much of its debt. And drastic devaluation of its new currency would make it competitive in a globalized economy.
Meanwhile, Italy is backpedaling on its "blood-and-tears plan" to raise taxes and cut its budget by €45 billion. In Spain and Italy, people are demonstrating in the streets, and strikers are paralyzing Italian air traffic. Austerity plans aren't popular. It's easier to borrow and print than to get your financial house in order.
This is exactly what Jens Weidmann, president of the Bundesbank, warns about in an interview published in the Börsen-Zeitung. Euro-Bonds would undermine the incentives for heavily indebted countries to build solid budget policies, he said. "The jump into common liability without limits on national sovereignty could unravel the institutional framework of the Monetary Union."
Already in August, the Bundesbank had lashed out fiercely (article in English) at its omnipotent sister, the ECB, for its decision to print money and buy sovereign bonds of debt-sinner countries. These attacks put the Bundesbank on collision course with export-oriented industrialists and financial institutions that have been the primary beneficiaries of its neighbors' borrowing binge, something Germans tend to forget in the heat of the battle. But it's not just Germans.
"Let the euro die its natural death," said Marine Le Pen (article in English) in her populist manner. The media-savvy and vocal president of the Front National of France is one of the top contenders in the 2012 presidential election. Populists in other European countries are gaining ground as well. People have always perceived the euro as an invention by the elite for the elite, and many of the current problems in Europe are blamed on it. So whether or not the eurozone will survive in its current form and with its current members is at least partially a question of its ability to run counter the will of its people, and get away with it.
Wolf Richter - www.testosteronepit.com
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They want to blow up the Euro, so that their primary host (USA) can continue to live for free in the global economy through printing. They will support this goal by whatever means necessary.
Not going to get a lot of love for G.W.'s more articulate twin here.
His rhetoric smells of ..... wait for it ..... either really bad feet or really good cheese.
Huh? India got it's independence non-violently. We won our independence after being attacked, which is self-defence. Guns=freedom is not a universal truth, just a slogan. I object to this financial blog being used for political sloganiring.
They got their independence after WWII from Britain/the West which was more open to that idea. They were already pretty free with a British system of justice. Notice they did NOT get their freedom from the Soviet Union, China or N. Korea. You see how well Tibet is doing, right? Taiwan has no worries either, right?
Really? Because they said please? Guns=self defense against oppressors (who often also have guns and not just bad manners.)
Actually, India got it's independence via the Pacific War: Japan's showing up the Brit Empire for a hollow reed. And then there's the few million Hindus and Muslims who slaughtered each other during independence/partition.
Objection overruled
India got its independence through violence. WWII destroyed the British Empire's ability to control its colonies. Learn a bit before you spout nonsense. No totalitarian government has ever willingly given up control. It is either through force or threat of force that they know they cannot defeat
India got its independence peacefully because Truman told Attlee at Potsdam: ... you have to break down the old colonial design as this allows USA to take over the world policeman role, that the upcoming stand-off with the Communists world-wide now entails... At Potsdam, Stalin made it clear he would fight the US tooth and nail to keep East Europe inspite of his promise at Yalta to honour local political will of people in "liberated" countries after WW2. ...We need free markets to sell our products, so break down your colonial protective environments, obsolete inventions that got us into European Armgeddon in the first place. Move Mr Attlee, and pronto!... Was Truman's message to him, as harbinger of FDR's overall game plan for pax americana of which he, the local, home grown politician was spokesman.
Attlee did. He named Mountbatten as GG of India with mission to engineer peaceful independence.
Read you history, Sun tutsie. It was an admission of end of "Rule Britannia" days, as Britain had no choice in 1945 being economically weak and penniless, depending on US handouts. Imposed by the USA on the free world. The age of pax Americana began after Potsdam. So there was no violence between coloniser and colonised. Nehru got it handed to him on a plate by Mountbatten. The only violence was the inter-ethnic bloodbath that resulted in the two country construct; as faithful to age old atavism, Mountbatten imposed surrogate partition on Nehru to create its dangerous alter ego, idealogically muslim Pakistan. The Brits know how to put a twister even when they are "even handed" decolonisers. Just like de Gaulle did with JAcques Foccart's slimy play of surrogate Franceafrique after the French "lost" the Algerian war politically, having won it militarily. That's politics!
As for India's own contribution to its independence its an undeniable fact; all through the peaceful opposition to colonial rule since Gandhi launched his surge for independence in 1931 and Churchill called him a "half naked" fakir. "Sand nigger" he truly was to the arrogant West, and he was treated as that. But he proved to the world what "I have a dream" means to the immortality of half naked fakirs when they enter the pantheon of world prophets.
Tyrants accept but one currency: brute force.
Indian may or may not have got independence due to world war 2 and its effect on british. But the fact remains is that the Indian independence movement on its own which started much before the start of world war 2 was predominantly non violent. The was a war and blooshed had nothing to do with the indian independence movement. Please do not go about spouting out your ignorance as facts.
Check this out: www.dixienet.org
Sounds great...if it was not regional and racist. We will not win split on these issues.