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Weidmann Slams French 'Savings' - Widening Franco-German Divide

Tyler Durden's picture




 

While German finance minister Schaeuble 'blessed' the French two-year grace-period for 'missing the deficit targets', adding that "he trusts France.. and is aware of its duties and responsibilities," it is his fellow countryman that is making headlines.

Though the pains to which the politicians are going to convince an increasingly gullible public that the Franco-German divide is strong, German central bank head Jens Weidmann has strongly criticized French efforts to reduce its budget deficit warning that French delays could damage the credibility of euro-zone rules. The real money man exclaimed, "you can't call that savings, as far as I am concerned," adding that France (as a 'core' member of Europe) must strive to set a positive example, and not "damage their credibility by taking advantage of the built-in flexibility."

We have been vehement (here and here) that France is on the cusp of a very serious depression and this 'verbal' pressure from Weidmann will not go down well with France's Moscovici who begged, "we don't want excessive consolidation for our country, we don't want austerity beyond what is necessary," but the broad fear is that France is setting a bad example, "only a question of time before other highly-indebted countries demand concessions."

Via Spiegel,

...

 

Jens Weidmann, the president of Germany's central bank, the Bundesbank, said he is adamantly opposed to the move. "You can't call that savings, as far as I am concerned," he told the daily Westdeutsche Allegemeine Zeitung in an interview. "To win back trust, we can't just establish rules and then promise to fulfil them at some point in the future. They have to be filled with life," Weidmann said.

 

France had originally hoped to reduce its budget deficit below the 3 percent limit this year, but with its economy suffering, the deficit is likely to be closer to 4 percent and slightly higher in 2014.

 

As a euro-zone "heavyweight", Weidmann said, France must strive to set a positive example. "Particularly now, at a time when we have strengthened the rules regarding deficit reduction, we shouldn't damage their credibility by taking advantage of the built-in flexibility. What we need is trust in our ability to clean up state finances."

 

...

 

French Finance Minister Pierre Moscovici said that Paris planned to scale back its austerity measures. "We don't want excessive consolidation for our country, we don't want austerity beyond what is necessary,"

 

...

 

German Finance Minister Wolfgang Schäuble likewise seems to be at pains to counter the widespread perception that France and Germany are at odds... "they are on the right track. France is a strong country and is aware of its duties and responsibilities." Earlier this week, Schäuble said he found the two-year grace period for France to be "appropriate." "I trust the Commission," he said, "but most of all I trust France."

 

...

 

France is in danger of "once again becoming the greatest transgressor of EU stability rules" and said it is "only a question of time before other highly-indebted countries demand concessions."

 

...

 

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Fri, 05/10/2013 - 08:04 | 3547677 buzzsaw99
buzzsaw99's picture

wawawa

Fri, 05/10/2013 - 08:07 | 3547684 GetZeeGold
GetZeeGold's picture

 

 

You'd have to be crazy to have savings in Euroland right now....you could get bailed-iin at any moment.

Fri, 05/10/2013 - 08:09 | 3547690 buzzsaw99
buzzsaw99's picture

It looks like they are on the verge of a north-south civil war to me.

Fri, 05/10/2013 - 08:48 | 3547813 negative rates
negative rates's picture

As France goes, so goes the world. There, I fixed for ya.

Fri, 05/10/2013 - 09:24 | 3547918 Surprese
Surprese's picture

And in the USA, you get what if a local bank goes bust?

Fri, 05/10/2013 - 12:40 | 3548742 Winston of Oceania
Winston of Oceania's picture

You should keep your money with you and your fiat in the bank... Only enough to make the necessary transactions of life and NOTHING more.

Fri, 05/10/2013 - 08:29 | 3547680 pashley1411
pashley1411's picture

There is simply no way that the Euro will remain a last bastion of strong currency, when all its trading parties are hurling themselves off the clift into liquidity paradise.  Print print print bitchez. 

Fri, 05/10/2013 - 10:14 | 3548109 piliage
piliage's picture

I'm waiting for the OMT surprise from Karlsruhe. If the EMT is held to 190 bil, I don't know how that can be squared with open ended bond purchases under the OMT. The question is, does the court play hardball and make a ruling before the election? I have wet dreams about the court blowing up Draghi's bullshit OMT and French and Italian bond cost going hyperbolic. A man can dream, can't he?

http://www.telegraph.co.uk/finance/financialcrisis/10021894/Bundesbank-d...

 

Fri, 05/10/2013 - 08:06 | 3547682 new game
new game's picture

just thieves bickering...

Fri, 05/10/2013 - 08:08 | 3547688 observer007
observer007's picture

 

An elegant way to solve the debtcrisis: Take the money from the rich

Offshoreleaks:

German Financeminister gets all data: 400 GB

How? Nobody knows.

Not "journalists" are behind the action, but the CIA

Target: get 30 Trillions from tax evaders and solve the debt crises

More: (german)

http://www.mmnews.de/index.php/politik/12926-offshoreleaks-schaeuble-erhaelt-alle-daten

Fri, 05/10/2013 - 08:17 | 3547692 W T F II
W T F II's picture

Weidmann reminds me of a Cypriot bank depositor yelling at the teller...Nothing more...What is he going to DO about it is ALL that matters...And, so far, that answer is: NOTHING...!!

Henceforth, he will be known to me as "The Knat"...swatting him away is easy...!!

PLUS, what he should REALLY slam and be worried about is Japan's unilateral 'in-your-face' Yen devaluation. What is he waiting for, Lexus to cost $9,995 while the Benz goes to $300,000...??

Fri, 05/10/2013 - 08:12 | 3547697 rsnoble
rsnoble's picture

They better knock it off or they could go into recession. LMAO.

Fri, 05/10/2013 - 08:17 | 3547708 SheepDog-One
SheepDog-One's picture

Manical Monetizers....LOL watching these guys is better than the 3 Stooges!

Fri, 05/10/2013 - 09:19 | 3547843 THE DORK OF CORK
THE DORK OF CORK's picture

The debt is not real ........

 

Its but a instrument.

 

Its all about real goods baby.

 

If France goes national German exports are fucked.

 

The UK & French elite is using German surplus production to crush domestic labour value ...........that is all that is happening.

Fri, 05/10/2013 - 09:19 | 3547847 THE DORK OF CORK
THE DORK OF CORK's picture

 

“Figures by country are only available in value terms. The widening of the deficit with the EU in the
first quarter came mainly from trade with Germany and the Netherlands. The deficit on trade with
Italy reduced slightly while the UK’s surplus in trade in goods with Ireland rose with an increase in
the level of exports” (this is normally refined oil products )

The trend continues…………….of increased North Sea trade but weakness in China & especially Japanese trade.

 

The UK has posted its largest quarterly deficit with Germany ever
Q1 2013
At £ – 5,621 million

Its largest deficit with Belgium
£ – 1,565m

Largest deficit with Netherlands
£ -2,897m

And indeed Spains austerity is working ………….for the UK
Largest deficit with Spain
£-860m

However balance of trade in oil is weak for the first quarter
Y2011 Q1 : -£1,556m
Y2012 Q1 : £-3,239m
Y2013 Q1 : £-2,227m

This probably explains the weakness of Norwegian trade.
Y2011 Q1 : £-5,123m
Y2012 Q1 : £-5,817m
Y2013 Q1: £ -3,631m

http://www.ons.gov.uk/ons/dcp171778_309779.pdf

 

Fri, 05/10/2013 - 09:06 | 3547857 THE DORK OF CORK
THE DORK OF CORK's picture

This is quite simple

 

Tell the Germans to fuck off and they are dead meat.

 

The Germans are driving a Junkers 87 .................the volume of their jericho horns tells you something profound .................that they are projecting strength through volume to hide a huge inherent weakness.

 

http://www.youtube.com/watch?v=kRr7HtedDsg

Fri, 05/10/2013 - 10:59 | 3548307 W T F II
W T F II's picture

You're Right...As described by Iron Maiden:

http://www.youtube.com/watch?v=LHXaoYWW6R4

Fri, 05/10/2013 - 09:14 | 3547892 bichat
bichat's picture

People in France are starting to see what 's behind the so called german success: no minimum wages, people paid 400€ per month... How are other countries supposed to compete with that? Of course if people were paid that amount of money the french unemployment rate would be as low the german one.

Politicians want to implement more flexibility in the  French professional world which means they want us as poor as german people.

Weidmann should be careful, it's not wise for him to comment on another country internal policies. I would say that a anti-german feeling is growing in France and everywhere in Europe because people feel like they are the one forcing those austerity policies.

Looking at Greece, Italy, Spain, Portugal etc, austerity is not a success AT ALL.

Lastly, Germany, just like every other county in the Euro area did lend money to the countries in need, however the people haven't seen any of this money, they are getting sacked, they are poor, they can't buy their meds, they can't buy food, they are being ejected from their house, and their money has been stolen to bail in big banks. So where did that money go?

People are suffering for nothing since everybody knows that all those countries are going to default on their debt.

Fri, 05/10/2013 - 09:17 | 3547900 THE DORK OF CORK
THE DORK OF CORK's picture

Look at Ireland

 

You really don't want to be the favourite schoolboy of the German headmaster   ......

 

Publication of the 10th Irish maritime transport publication where the director states quite openly that they have seen probably the biggest boom and bust in the history of shipping markets.

http://viewer.zmags.com/publication/2d9731e6#/2d9731e6/40

He points to the symmetry of the Irish maritime transport sector and the real Irish domestic economy (not GDP increases which includes high value low weight exports which are generally somewhat outside the domestic economy as it is beyond the tax system)

However dry bulk volumes increased by 7%
As a result of farmers importing extra feed in the wet summer of 2012 (agri is 22% of total dry bulk volumes) and steady demand for steam coal in Moneypoint power station.
We have a crazy Aluminium factory in Shannon which dominates dry bulk imports – Bauxite – its there for purely tax arbitrage reasons as it uses it own Gas turbine in this very high energy operation !!!
There was huge controversy about this in the early 80s with a nearby farmer on the national television politics / debate show claiming his cattle were dropping like flys because of the toxic dust from this site.
Despite its continued operation in such a crazy area (Hydro Iceland is better) it is generally not talked about in polite Irish circles.

Liquid bulk is down maybe 3% in 2012 when you subtract Bantry in the SW (this is a long term oil storage area)

break bulk volumes (eg. timber , machinery) down 3% , decreased for 5th year straight and is at a 10 year low.
Much of this is coastal traffic in the smaller ports such as New Ross (JFK ancestors home town) although the big ports dominate all sectors now.

Lift on lift off experienced a 3% decline in 2012 when it was growing at 7% a year a decade earlier.

passenger traffic declined by 4% and the tourist car market by 7 %……

The depression in Europe continues…………..
All so that the banks can have access to cheap labour arbitrage profits from Asia & Germany.

Fri, 05/10/2013 - 09:14 | 3547894 THE DORK OF CORK
THE DORK OF CORK's picture

The French want to spend money on domestic capital construction...........

 

Why export when you can get BMWs for freeeeeeeeeeeeeeeee

 

 

http://www.railwaygazette.com/news/policy-legislation/single-view/view/EUR450m-sustainable-transport-fund-announced.html

Fri, 05/10/2013 - 09:32 | 3547942 Monedas
Monedas's picture

"The Party's over !"  All French people .... return to work .... for the rest of your .... snail sucking lives !   LOL

Fri, 05/10/2013 - 10:34 | 3548188 fabmax
fabmax's picture

Weidmann, Merkel. schable, fucking idiots

They don't care to shatter the whole continent. Bastards, we should hang all of them together.

Fri, 05/10/2013 - 12:04 | 3548584 luckylongshot
luckylongshot's picture

So according to this articlte there are people that still trust France.....A recent ZH story explaining why the French cannot be trusted said... "Germany's Die Welt am Sonntag has found that the Bank of France overpaid up to EUR550mm ($720mm) on its short-term paper financing to six French and Italian banks" ....case closed.

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