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Merkel Advisor Feld: "Euro Crisis Will Return Shortly And With A Vengeance"

Tyler Durden's picture




 

For all the groundless, starry-eyed optimism permeating Europe's bureaucratic corridors of the fading oligarchy these days (because this time is not like every other time that, too, was different), there has always existed one sure, never-fail antidote: Germany, which without fail has managed to ground Europe any time its delusion of grandure hit escape velocity. Sure enough, while all the statist soothsayers who threatened with armageddon if the outcome of the Italian elections happened to be precisely the one that transpired, were stuck in backpedal mode, and scrambling to calm nerves that all shall be well after all, one person who refuses to play by the script is Lars Feld, member of panel of economic advisers to German Chancellor Angela Merkel, who in an interview with the Frankfurter Allgemeine Zeitung tomorrow says the euro crisis is to return shortly and "with a vengeance" as capital loss will lead to higher risk premiums for Italy’s interest rates.

From Handelsblatt, previewing the FAZ Wednesday edition:

The Italian economy would not find their way out of the recession, according to the pessimistic assessment by Lars Feld: "The sustainability of Italian public finances is in jeopardy. The euro crisis will therefore return shortly with a vengeance."

 

Apparently, the Italians were not ready to move on the path of reform that has been taken by Mr. Mario Monti, Field said.

 

"You can not expect that Italy's European partners or the ECB will stabilize the Italian economy, when its people are not ready for reform."

And making sure Feld is not alone, he was joined by Anton Boerner, head of Germany’s BGA exporters’ association, who in turn said Italy must reform tax, labor, judicial system or risk "irreparable damage" of euro. Finally, Boerner says if Italy not willing to reform, "we have to think about how to deal with a modified eurozone."

What exactly a "modified" eurozone means we don't know. We will, however, surely find out soon enough.

 

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Tue, 02/26/2013 - 19:44 | 3279778 q99x2
q99x2's picture

May I suggest that Germany begin arresting the banksters that got them into this mess. More than enough evidence to start arresting them for commiting fraud.

Tue, 02/26/2013 - 19:47 | 3279790 UnpatrioticHoarder
UnpatrioticHoarder's picture

Must be time to jawbone the Euro lower again

Tue, 02/26/2013 - 19:59 | 3279821 Divided States ...
Divided States of America's picture

Tank the markets, that should make the Italians wake up. Unless of course most Italians are broke and not invested in the stock market anymore.

Tue, 02/26/2013 - 20:13 | 3279858 knukles
knukles's picture

WHAT!?!?!?!
THEY JUST SAID IT WAS ALL FIXED!

AAAARRRAGHH!

New EU lament:  It's Grillo's fault

Tue, 02/26/2013 - 20:27 | 3279924 walküre
walküre's picture

Germany has federal elections coming up in September (edit)

Watch for the party/candidate who talks down the Euro and pulls a Grillo. Sure to get the majority of the votes.

God forbid, the people would actually have a choice! I don't see any such party or candidate yet but there is still time to emerge.

Tue, 02/26/2013 - 21:34 | 3280140 disabledvet
disabledvet's picture

obviously i'm over here in the states and there are many much closer to this than i ever could imagine being...but i really doubt this will be the case in Germany. I think the memory of the hyperinflation in Weimar is very much remembered...and Germany simply put won't go there. "Taking out" Greece (so to speak) is one thing. Italy is a CORE member of the eurozone. this talk is more than just tough talk as well. these are words backed up by the full force of the massive German economy. One could argue with Italy ahem..."out of the picture" there is more...ahem..."breathing space"...for the euro to expand. Having said that i don't see how France can remain in the EZ should Italy be "exited." Obviously should this "final straw" happen then there are potentially some very profound political and security implications. i'm sure there are a lot of folks out there FAR more expert than me working through the scenarios but clearly you have to include the idea that such a breakup would be FAR from amicable. "there is no DeGaulle"...and i think truly a presence such as his is very much needed for Europe right now. But that was then...this is now. http://www.youtube.com/watch?v=K5WxLMeFrrE

Tue, 02/26/2013 - 22:04 | 3280252 magpie
magpie's picture

In German MSM no one gives a rats ass about the Weimar hyperinflation. The Greek and Spanish bailouts were also considered an impossibility, which leads us to conclude...

Wed, 02/27/2013 - 02:01 | 3280612 TruthInSunshine
TruthInSunshine's picture

The results of yesterday's elections in Italy almost certainly spell the end of the € in anything remotely resembling what it has since its inception as a monetary union instrument of commerce (and at a level that was once considered to hold the potential to rival the USD as a near full reserve currency).

The EU never achieved what it ostensibly set out to at the outset because its articles of incorporation were fatally flawed in that there was no framework for a true and enforceable political union.

Now, the massive diminishment of the € as an instrument of commerce even intra-EU, even with the distinct possibility of a dramatically smaller core EU (we might see a future European Union Tier 1, Tier 2 and even a potential Tier 3), will amplify the adverse impact of everything that the EU braintrust got wrong from the start and which they perpetuated in a stupid game of kick-the-can.

I'd love to hear any countervailing opinions rebutting mine that the € is almost inevitably certain to be pounded into dust in the months and years to come.

Wed, 02/27/2013 - 03:27 | 3280967 Lore
Lore's picture

Regardless of how it might or might not be structured, now or in the future, the fact remains that Main Street Europeans NEVER WANTED IT IN THE FIRST PLACE.  When Hitler and Lenin wrote about amalgamation into a "United States of Europe," they were not concerned about the well-being of the electorate. As always, it boils down to DEBT and CONTROL.

Wed, 02/27/2013 - 03:39 | 3280974 Ghordius
Ghordius's picture

TIS, one countervailing thought: it's all based on the assumption that Italy truly wants to exit

have you ever had a shopping spree in an eastern bazaar? threathening to leave the shop in rage is called bargaining

your point of no framework for a true and enforceable political union is correct - there is no political will to that

even I do not want it - and may I point out again that EU and EZ are separate clubs

the magic word in all this is option: any currency exiting would have to find an anchor, eventually, and then you are back to step one

the logic of a currency war

Wed, 02/27/2013 - 11:29 | 3281739 TruthInSunshine
TruthInSunshine's picture

Wouldn't the simplest path to allow the widely disparate (economically, politically & socially) nations of the EU to more efficiently rebalance their economies by allowing them to re-implement their own fiat currencies, that can be internally strengthened or weakened (depending on such things as whether they want to boost exports, etc.)?

A Germany and Spain or Italy sharing the same fiat currency does not allow for any such flexibility.

The € can't possibly do what it must be allowed to do because of the tremendous comparative and competitive disimilarities between EU Member States.

Tue, 02/26/2013 - 23:28 | 3280587 AGuy
AGuy's picture

Or Germany dumps the Euro for the Deutch marks they printed up a couple of years ago. Germany will likely opt out of the euro, after they get tired of bailing out club med.

 

 

 

 

Tue, 02/26/2013 - 21:49 | 3280187 gkampou
gkampou's picture

"Fixed" is right, just like a horserace......

Wed, 02/27/2013 - 07:53 | 3281142 NoDebt
NoDebt's picture

And you can turn the losing horses into yummy meatballs and eat them when it's over!

Sorry, couldn't help myself.

Tue, 02/26/2013 - 20:17 | 3279885 ArgentoFisico
ArgentoFisico's picture

what about sayin Merkel "fuck off You and your fuckin mark-euro"?!

Tue, 02/26/2013 - 20:15 | 3279874 jldpc
jldpc's picture

God damn that is a good idea/.

Tue, 02/26/2013 - 20:27 | 3279932 orez65
orez65's picture

German exports boomed with the creation of the Euro.

Interest rates of bankrupt European Nations (EU), like Greece, dropped to the same level as Germany's and now they could buy lots of stuff from Germany.

All of Germany was into the scam, not just the banks.

So arrest them all!

Tue, 02/26/2013 - 23:26 | 3280578 Accounting101
Accounting101's picture

Exactly! Enough of the false narrative expounding on the moral rectitude of the thrifty Germans. Germany and German banks had no problems with supplying cheap credit to the peripheral countries.

Tue, 02/26/2013 - 23:31 | 3280600 AGuy
AGuy's picture

"German exports boomed with the creation of the Euro."

German exports would have boomed without the Euro as demand for German products in North America and Asia soared.

Tue, 02/26/2013 - 20:45 | 3279991 Bunga Bunga
Bunga Bunga's picture

That would be anti-semitic.

Tue, 02/26/2013 - 22:00 | 3280236 TNTARG
TNTARG's picture

Deutsche Bank is one of the strongest, pal. It's the PIIGS who must turn their backs on them. Germans never will, I think.

Wed, 02/27/2013 - 03:04 | 3280947 Lord Of Finance
Lord Of Finance's picture

I do not like to cut in line, but I must say in response to q99x2:

 

   Indeed. In fact I would go a step further. I suggest that Germany start rounding them up they way they did it in olden days, under the leadership of a shrill voiced lunatic with a Charley Chaplan moostache. Germany could finally make full reparations for the atrocities commited to millions of innocents some 7+ decades ago. How?

 By rounding up the guilty as hell banksters and put them all in camp where the only daily activity is back breaking labor, followed by agonizing scientific/medical experiments, and then straight to the firing squad AND finally, straight to the human barbeque pit.

Tue, 02/26/2013 - 19:44 | 3279780 smlbizman
smlbizman's picture

is it tomorrow over there now? or are we getting advance info......remember the rules gentlemen and ladies

Tue, 02/26/2013 - 19:47 | 3279788 McMolotov
McMolotov's picture

"Apparently, the Italians were not ready to get butt-raped by Mr. Mario Monti," Field said.

More accurate.

Tue, 02/26/2013 - 20:03 | 3279812 tickhound
tickhound's picture

 

 

"ah si, la banana nel tubo di scappamento il trucco"

"ah yes, the banana in the tailpipe trick"

Tue, 02/26/2013 - 20:05 | 3279840 SemperFord
SemperFord's picture

Damn that Axl Foley!

Tue, 02/26/2013 - 19:48 | 3279795 unrulian
unrulian's picture

 "At an end your rule is, and not short enough was it"

 

Yoda

Tue, 02/26/2013 - 19:51 | 3279804 John Law Lives
John Law Lives's picture

This is off topic, but I came across this article today. This WILL infuriate many people:

Recluse's gold fortune to be auctioned for taxes
Auction selling gold coins left by Nev. recluse who lived modest life with millions in garage
By Matt Woolbright, Associated Press | Associated Press – February 26, 2013 

http://news.yahoo.com/recluses-gold-fortune-auctioned-taxes-144757875.html

Tue, 02/26/2013 - 21:18 | 3280039 The Thunder Child
The Thunder Child's picture

Auction fees, taxes, estate handling... County assesments... Thats 800k mr.....ummmmmmm, oh hes dead he wont care.

Tue, 02/26/2013 - 22:53 | 3280458 WillyGroper
WillyGroper's picture

Those BASTARDS!

Tue, 02/26/2013 - 19:57 | 3279817 Michelle
Michelle's picture

The eurozone will never have a fiscal union and keeping up the charade insults our intelligence. Let the damn thing collapse already.

Tue, 02/26/2013 - 19:58 | 3279820 LawsofPhysics
LawsofPhysics's picture

Reform the people?  Reform the banking and financial sector motherfucker.  The "people" don't have shit to "reform".

Tue, 02/26/2013 - 21:02 | 3280053 Just Ice
Just Ice's picture

yea, those nasty Italians were out of line!  How dare they reject the mini NWO experiment...

Tue, 02/26/2013 - 20:02 | 3279827 magpie
magpie's picture

Get on with the show, give them the bailout already.

If you do it now, you can at least surrender to Bersani instead of Beppo or Bunga-Bunga.

Tue, 02/26/2013 - 20:01 | 3279829 Bingfa
Bingfa's picture

Good gawd, how many times we been here?

Let us up, we've had enough of all the BULLSHIT.

For the love of God. please

Tue, 02/26/2013 - 20:15 | 3279867 knukles
knukles's picture

Grillo up, Clowns!

Tue, 02/26/2013 - 20:29 | 3279933 Bingfa
Bingfa's picture

LOL, somebody put a bullet in em and call it a mercy killing...

This is hilarious

Tue, 02/26/2013 - 20:02 | 3279830 ZippyBananaPants
ZippyBananaPants's picture

"nothing can kill this market, put a bullet in its head and its going higher, comet could hit NY city and it would go higher, im Cramer and my head is so far up my ass I can taste my farts before they form"

Tue, 02/26/2013 - 20:15 | 3279873 knukles
knukles's picture

"and my head is going higher"

Tue, 02/26/2013 - 20:13 | 3279860 Rustysilver
Rustysilver's picture

Let me say this: thank  you Italians for what you have done.  I don't know how it will turn out in the end, but, at least, you have shown other people in Europe that one can attempt to change the status quo. My country, US, is so messed up, I see no hope.

Tue, 02/26/2013 - 20:14 | 3279864 monopoly
monopoly's picture

So, it is Italy we have to worry about. OK, I thought Portugal, Spain, Great Britain and France were also a problem and they too would need more infusion of capital. I am glad that is not the case......Eh, what was that. Oh, they are all the problem. Hmmm.

Well, at least America is on sound footing as we tackle our spending problems......NO. We are the worst??

Oh my. We are so screwed.

Tue, 02/26/2013 - 20:15 | 3279868 Tango in the Blight
Tango in the Blight's picture

Eventually some shit will happen. But you may grow old and die before it happens.

Tue, 02/26/2013 - 20:18 | 3279889 knukles
knukles's picture

That's depressing.

Tue, 02/26/2013 - 20:16 | 3279876 tony bonn
tony bonn's picture

all this means is that the chairsatan will continue his perfervid monetizing of european debt...

Tue, 02/26/2013 - 20:20 | 3279898 ebworthen
ebworthen's picture

Euro crisis please.

Italy leave the Euro, please.

Crush the Central Banks and the banksters who are putting regular folks into indentured servitude without representation.

Tue, 02/26/2013 - 20:25 | 3279919 Mark123
Mark123's picture

I wish I lived in Italy....at least they have cheap wine, great weather, great food and good looking women.

 

And, they have Grillo.

Tue, 02/26/2013 - 20:49 | 3280010 orez65
orez65's picture

Keep trying to figure out the "root cause" of this financial mess.

Conclusion: About. 90% of Americans and Europeans don't understand what MONEY is.

Tue, 02/26/2013 - 21:03 | 3280054 akak
akak's picture

I think the figure must certainly be well above 90%.

99.44% pure and willful stupidity.

Tue, 02/26/2013 - 21:23 | 3280106 worbsid
worbsid's picture

What's his name ... the delinquint vet ... said we have the right to be stupid.  It's stupid to say that in mixed company. 

Tue, 02/26/2013 - 21:08 | 3280024 Kirk2NCC1701
Kirk2NCC1701's picture

Oh, I see:  In Q1 Japan crashes the Yen to lift exports a tad but monetize their debt a LOT.  In Q2 the UK takes its turn.  In Q3 the EU gets in on the cluster-ficken, and in Q4 it's America's turn. 

They take turns blowing (fiat inflation) and sucking (real wealth).  Ditto for 2014.  Boy do we feel... "cheap & used".  Bonga, Bonga!  In the meantime, while they're f-packing, the BRICs keep "stacking".

Who gets the Nobel-Krugman prize for this scheme?  Bernanke, Krugman, Rickards?

Tue, 02/26/2013 - 21:11 | 3280075 Ban KKiller
Ban KKiller's picture

But Italy says THEIR derivatives are REAL assets. GS told them so. 

Tue, 02/26/2013 - 21:34 | 3280141 electricgorilla
electricgorilla's picture

Italian financiars should be buying volatility options. They know how to stir the pot. Is the new Pope going to be black?

Tue, 02/26/2013 - 21:50 | 3280194 IMA5U
IMA5U's picture

Zero Hedge readers can only hope The Euro Crisis is back so the world goes to hell and a handbasket

 

And hopefully Gold rallies

Tue, 02/26/2013 - 22:54 | 3280469 khakuda
khakuda's picture

A euro debacle would sure do it.

Wed, 02/27/2013 - 00:15 | 3280728 hardcleareye
hardcleareye's picture

Seems to me the Euro is suffering from a credibility trap....

In the words of Jess...

"A credibility trap is a condition wherein the financial, political and informational functions of a society have been compromised by corruption and fraud, so that the leadership cannot effectively reform, or even honestly address, the problems of that system without impairing and implicating, at least incidentally, a broad swath of the power structure, including themselves."

 

Tue, 02/26/2013 - 22:00 | 3280229 magpie
magpie's picture

I just loved reading the angry comments in German newspapers who defended the 'alternativlos' solidarity bailout to poor Greece against reactionary racist German populists but now are screaming bloody murder because of the stupid and lazy Ithakers' inability to understand the European project.

Tue, 02/26/2013 - 22:13 | 3280289 OldE_Ant
OldE_Ant's picture

"we have to think about how to deal with a modified eurozone."

translated. Looks like we'll let Italy fend for itself while we try to prop up what is left.

Big question is who is knee deep in Italian debt that is already on the edge.?

Tue, 02/26/2013 - 22:24 | 3280319 TNTARG
TNTARG's picture

Naaaaaaaaaah! I love the mainstreams titles:

Philipp Missfelder, CDU's foreign policy manager (CDU is Merkel's party): "You italians aren't Greece, you're a G8 member and a key member of the Eurozone. Euro can't afford a greek-like scenario, new elections on a short term... It will be an instability excess". (Repubblica.it)

Wall Street Journal on line: "Uncertain Election Results Rekindle Euro-Crisis Fears"

The Economist: "Italian politics. A dangerous mess" (loved the caricature)

CNN: "Italy sparks new fears for eurozone"

Frankfurter Allgemeine: "Allarm signals, almost half of italians choosing anti-europe options"

The GUardian: "Deadlock at Rome"

and so on.

Banksters' media spreading fear... Or feeling the people breathing on their neck?

Tue, 02/26/2013 - 22:24 | 3280344 magpie
magpie's picture

You aint seen nothing yet...the media will have to defend austerity in Italy while attacking & shifting the blame for the "sequestration" in the USA.

Wed, 02/27/2013 - 00:05 | 3280704 hardcleareye
hardcleareye's picture

Oh shit....  this isn't going to be pretty!

 

Wed, 02/27/2013 - 01:59 | 3280899 Peter K
Peter K's picture

How's that for a breath of fresh air. Kick the bum's out of the Eurozone.

 

But seriously, I think the next phase is a referendum on staying in the Euro. Italy has the most of any of the other Euro prisoners to gain by ditching it. And they have a 1 + 5 star coalition that just got 60% of the vote. :)

Wed, 02/27/2013 - 09:37 | 3281345 Toolshed
Toolshed's picture

Interesting. The message I got from this is:

"If you refuse to vote the way we tell you to, we won't let you play with us anymore."

Not refreshing at all in my opinion.

Wed, 02/27/2013 - 05:58 | 3281089 smacker
smacker's picture

 

 

A major problem in Italy, Spain and even more so in Greece is that the populations of these countries wanted to join -- first the EU, then the Eurozone -- because they saw it as a route to bringing themselves into mainstream Europe and of bringing their utterly corrupt political elites to heel. It hasn't worked. The elites still have their hands in the till and kickbacks are rampant.

Many Greeks are still adamant to remain part of the EZ despite the economic collapse it has brought them but they offer no solution to their nation's debt crises, except to reduce austerity and implicitly borrow more. That won't work either.

Of course, the corrupt political elites of all these countries -- instead of allowing themselves to be brought to heel -- saw an opportunity in joining the EZ to raise their borrowing/spending on vanity projects and generally milk the rich northern members like The Fatherland. The Germans and French (and the EU-cratocracy under Barreloso) only have themselves to blame for this crises.

Unless one or more EZ member nations decide that enough is enough of this nonsense, it could go on for years, occasionally boiling over as we now see because of Italy's election results. But dealing with it requires that someone in each country has the intellect and power to take meaningful decisions to break the insanity. I am doubtful that such people exist.

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