54% Of Germans Hope Krimson Kardinals Just Say "Nein" To ESM, As Greece Is Once Again On The Edge

Tyler Durden's picture

There are two key events in the coming week: first, on September 12, is the decision of the German Constitutional Court, aka the Krimson Kardinals of Karlsruhe, whether the ESM, or the ECB's primary market bond monetization program, is legal. A no vote would severely cripple the European "make it up as you go along" bailout and leave Europe's peripheral nations with little recourse, and Spain with even less cash as it faces a wall of bond maturities in both October and 2013. Then, on Thursday, the Federal Reserve will most likely underwhelm the market which is expecting a new substantial round of outright Asset Purchases, aka NEW QE, which however as we explained will almost certainly not occur due to various reason first described here last Friday. A third, and perhaps far more important event, will be the Dutch parliamentary election also on September 12, but more on that in a further post. For now, looking at Germany, and the piecemeal attempt to put back together the European house of monetary cards, we find that in Germany - the country tasked with funding the European implosion - the population has decided, by a 2 to 1 margin - that the constitutional court should just say "nein" to the ESM, and let Europe go on its merry way without German backing (because as a reminder, the primary source of ESM funding is Germany). From Spiegel: "A survey shows that the majority of Germans hope that the judges in Karlsruhe reject the permanent rescue fund ESM. 54% want a reversal of the Bundestag decisions on the ESM and Fiscal Pact, which should be legally halted. Only 25% believe that the court should dismiss the urgent appeals of the Euro-skeptics."

As if we didn't already know, the majority of Germans are less than enthused about funding their insolvent neighbors:

According to the German population, there is a skeptical mood against the EU. According to the survey 53 percent are against the EU to transfer more powers. Only 27 percent are in favor. 42 percent would be an exclusion of Greece from the euro zone welcome. 30 percent would find it not good. 56 percent are worried before a breakup of the euro zone as a whole.

None of this is new and since in Europe the popular vote no longer matters on important matters such as whether or not to perpetuate failed monetary regimes, the only opinion is that of several red robe-clad men and women.

Elsewhere, and in what will likely bring Greece back to the forefront of newsflow, Bloomberg reports that "Greek Prime Minister Antonis Samaras failed to secure agreement from his coalition partners on 11.5 billion euros ($14.7 billion) of spending cuts required by the country’s lenders to release funds needed to keep the country in the euro."

Democratic Left leader Fotis Kouvelis, whose party is one of the three in Samaras’s coalition government, said no decision had been taken on the package and that poorer Greeks must be protected from more austerity. The three leaders agreed to meet again on Sept. 12, two days before euro area finance ministers meet to be briefed on Greek progress.

 

“The recession is deep and if these measures aren’t accompanied by growth measures, they will be ineffective,” Kouvelis said after the meeting with Samaras and Pasok leader Evangelos Venizelos in Athens yesterday. “Our European partners need to know that Greeks can’t take anymore. Nothing can be taken for granted.”

 

Samaras has said his two-year package of spending cuts contains unfair and painful decisions that are necessary to restore credibility and keep the country in the euro area. With his New Democracy party holding just 129 seats in the 300-seat chamber, he relies on Pasok’s 33 seats and Democratic Left’s 17 to secure parliamentary approval.

 

Agreement on the cuts, which must be approved by the so- called troika of inspectors from the euro area, European Central Bank and International Monetary Fund, may allow the release of a 31 billion-euro payment that will mainly go to recapitalize the nation’s banks and boost liquidity in a cash-starved economy undergoing a fifth year of recession.

In other words, if there is no agreement on the side of Greece as the Troika goes to Athens to determine if the Greek deficit cutting plan is viable, there will be no new aid tranches, and the Greek government will likely fall a few short months after a revote barely managed to cobble a tenuous coalition. And should a new vote take place now, it will hardly please the europhiles because as the WSJ reports the anti-memorandum Syriza would surely win the elections.

According to a survey prepared by VPRC polling agency and published in Ellada Avrio newspaper, the opposition Syriza party would garner 30% of the vote, while conservatives New Democracy--who lead the coalition government--got 28% of the support.

 

New Democracy is the major partner in Greece's coalition government together with two center-left junior partners, the Socialist Pasok and smaller Democratic Left parties. The conservative party won Greece's mid-June elections after getting 29.6% of the ballots leading the radical-left Syriza party by three percentage points.

And while it is unknown if a pro-Europe coalition can be cobbled should there be a new round of elections, what is certain is that in Greece the economic reality is going from bad to worse, with unemployment soaring by 1% in the month of June alone, and where now that the summer holidays are over, the labor strikes have once again returned, pitching Riot police against regular police, and judges, doctors and teachers against everyone:

Judges, doctors, pharmacists and teachers are this week all expected to launch industrial action to protest government cutbacks, sparking a new round of strikes and protests that will coincide with meetings between government officials and foreign envoys.

 

Unionists representing judges met Friday with Prime Minister Antonis Samaras and Democratic Left leader Fotis Kouvelis separately to air their grievances after Finance Minister Yannis Stournaras refused to revoke plans to cut their salaries by up to 25 percent.

 

Teachers are to walk off the job on Thursday, protesting salary cuts, and hospital doctors are expected to launch go-slow or strike action next week in protest at cutbacks in their sector.

To summarize: much more deja vu, all over again.

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Jay Gould Esq.'s picture

Prediction:

The "Krimson Kardinals" will display the same degree of jurisprudence as did the Supreme Court of the United States regarding the constitutionality of the Administration's centerpiece ACA. All of these modern-day jurisprudential bodies are cut from the same autocratic bolt. Expect nothing less than the affirmation of the central government's intended policy.

DeadFred's picture

It would be surprising if they decided based solely on legal principles but the politics cut both ways. This could be Merkel's method of saying no without taking the rap. I expect the decision will be like the FOMC meeting, mostly negative but ambiguous enough to be spun by the MSM as positive.

Cult_of_Reason's picture

Even a "yes" vote could come with some heavy conditions (for example, need for the Bundestag's, German Parliament, vote approval which could put a cap on the amount of money Germany can contribute, meaning Draghi will have a cap and cannot do "unlimited" bond buying, cannot do "whatever it takes", etc.)

boogerbently's picture

A "Yes" vote with such harsh restrictions rendering it effectively a NO vote. NO ONE wants to pay, but no one wants to take any blame, either.

They ALL want Greece to DECIDE to leave.

"Krimson Kardinals of Karlsruhe"

KKK, preceded by an article about an increasingly popular Greek neo-nazi group!!!

 

boogerbently's picture

EU, China, and BenB.....

all playing "who will QE first?" (...so I don't have to!)

They've been getting along just fine implying they could, might, maybe, perhaps....Ease.

 

chump666's picture

Study the Wiemar period of German history.  Also study how the Bundesbank is a integral part of the ECB (note also the the amount of German banker/officials resigning from the ECB).

This is what we got.  Weak politicians getting gamed by a ECB, with a mad Italian running the show.  A non elected person who now is the most powerful man in Europe.  He can rally markets to the highs we have  with just words, if he gets unlimited access to print on 2-3 yr bonds (backed stopped by the German guaranteed ESM).   Europe will become a hyper-inflated hellhole.  If this Mario is stopped in his tracks by a Bundesbank/German Crt revolt against the nut, he will blame a stock crash on Germany.  Who cares, 95% of the global population couldn't care less about stocks.  But this is how this guy is thinking.  Europe is on the brink.

A year of so of deflation and re-balancing of prices is a good thing, look at Iceland.  You take the pain, then come back stronger.  Delay the pain, or numb it.  You just end up dead.

The Germans, I hope, stop this madness.  Since the judicial system looks at the best interest of the people.  Remember, America is in la la land still.  But the Germans actually had a horrendous period of hyperinflation and dislocated society (1920s to 1980s).

I suspect they do not want history repeated.

Say nein Germans, and kick out Greece and Spain immediately. 

CrashisOptimistic's picture

If you look carefully at Merkel's quotes, you'll see that she says she supports the ECB's actions within its mandate.  

She is referring to actions taken so far WHICH ARE NONE.  She is giving support to the verbal bullshit.  Not A Single Bond Has Been Bought. 

chump666's picture

The ECB balance sheet is packed with Spanish, Greek and Italian waste.  The biggest con job this side of the Fed, was when the banks of Europe which are insolvent piles of junk, dumped junk onto the ECB - as Germany backstopped. Merkel is skating on thin ice.  Anyone denying inflation is off their brain.  It's here. Does it go hyper?  Maybe.  Say Russia cuts the gas lines again, China gets frisky with Japan in three months.  Or Iran (re: Canada pulling out staff) war finally blows up. 

If the ECB starts printing in tandem with the Fed, which the market is now indicating is going to happen (after a possible crash/correction)...I hope the peoples of the world burn those central banks to the ground (metaphorically speaking...or not).

chump666's picture

Germany do your thing, cut the ECB free.  It's funded by the Fed anyways (via USD swaps):

The European Central Bank's treatment of Deutsche Bundesbank President Jens Weidmann has been "unbelievable" and borders on "harassment," former ECB economist Juergen Stark said in a newspaper interview published Monday. On Thursday, ECB President Mario Draghi said the bank would prop up the debt markets of struggling euro-zone states by buying those states' sovereign bonds, provided their governments are signed up to a euro zone-approved assistance program. Mr. Weidmann and Germany's central bank and have long opposed the measure, equating it to monetary financing of government debt. Mr. Draghi directly acknowledged the objections of Mr. Weidmann at a press conference in August. "I regret that the discussion of the ECB was highly personalized. This is not only unfair, it's unacceptable and borders on harassment," Mr. Stark told German regional newspaper Rheinische Post. "The Bundesbank president's argument is convincing and conclusive. His position lies fully within the continuity and the tradition of the Bundesbank, which for many decades has been one of the most successful central banks in the world." That the ECB's Governing Council overwhelmingly voted in favor of bond-buying doesn't speak for the quality of the decision, which is incredibly risky, Mr. Stark said. "The ECB is acting outside its mandate." Mr. Stark served as ECB chief economist from 2006 until resigning at the end of 2011 to protest the bank's purchase of government bonds through its Securities Markets Program. Mr. Stark also said Greece exiting the euro zone would be expensive but "manageable," and that Spain will likely be next to seek a bailout. "I think Spain needs a comprehensive program with strict conditionality," he said. Newspaper website: www.rp-online.de

paulie's picture

Germany's hyperinflation was caused ultimately by the austerity measures imposed bye the treaty of Versailles.

Death and Gravity's picture

NO ONE EXPECTS THE SPANISH INQUISITION!!!!

*surprised gasps*

Our chief weapons are fear, surprise, and a generic bond yield of over 6.66%.

Now. How do you plead?

beachdude's picture

Hmm... Wednesday and Thursday PM dip?

Haole's picture

The question of whether or not one should buy should it happen is far from a question however.  ;)

boogerbently's picture

SOMEONE is going to print!!!

I think it's the EU's turn.

Gold up either way.

Ookspay's picture

Maybe, but I don't think so... Gold 2K by months end!

boogerbently's picture

Here is what we have ALL been anxiously awaiting:

http://finance.yahoo.com/news/cramers-game-plan-week-ahead-145305551.html

No mention of the FOMC meet on Thur.

Just an oversight, I'm sure.

Haole's picture

Reassuring to know that as well as "science" being largely a perverted, manipulated and alchemic "religion" that finance is now also... In the red, bitchez.  Red get-ups = LULZ

Edit:  Ah, so far two geniuses with no comprehension of sarcasm, I know more of you are out there, show yourselves...

boogerbently's picture

Sarcasm?

"Reassuring to know that as well as "science" being largely a perverted, manipulated and alchemic "religion" that finance is now also"

...truer words were never spoken.

 

Haole's picture

Sarcastic overtones make it less painful for me anyway and thanks.

Jason T's picture

The Germans read Faust and understand this Faustian bargian of printing money or giving the bank the licence to print money.  Tis a deal with the Devil.  They made that deal once before and it didn't end very well.

Things that go bump's picture

That is why a long spoon is the recommended utensil when dining with the devil.  

ptoemmes's picture

Anyone remember how the "citizenry" felt about TARP and what happened then? OK it required a Mulligan, but still...

Curt W's picture

I expect the S&P to rally on the news,

No matter what the news is.

nmewn's picture

This is not a democracy you serfs.

You vill respect zeee authoritah of Costa v ENEL.

///////////////////////

Whooop...got a nibble here...lol.

"It follows from all these observations that the law stemming from the treaty, an independent source of law, could not, because of its >>>special and original nature,<<< be overridden by domestic legal provisions, however framed, without being deprived of its character as community law and without the legal basis of the community itself being called into question."

You stupid fucking european serfs...hey!!!...I'm just paraphrasing there ;-)

Cursive's picture

The world continues the downward spiral and, yet, there has been little political fallout and our markets suggest things have rarely been so good.

TrustWho's picture

Subsidizing east germans is different than subsidizing the PIIGS-F. Germany's future lies east!

icanhasbailout's picture

The interesting part comes when people realizing that more productive work gets done when the government workers are on strike

Colonel Klink's picture

Hold on to your hats everyone!

Oops, that was last weeks captioning contest.

One can only hope they're smarter than our Extreme court.  Making up bullshit, one decision at a time.  Like corporations are people.

knukles's picture

Like I asked my lawyer (We have a relationship very similar to Hunter Thompson and Oscar Zeta Acosta, very reserved and professional) so then why cannot I be a corporation thereby wrapping myself in an invisible cloak of limited liability so I might enjoy living my life to its fullest reckless abandon?
He counseled me to not hold my breath as the ether could eat most of the rest of my brain away far too quickly to remain even marginally passable in public. 
Which then encouraged me to establish Kunkie's School of Law and Jurisprudence (Pretty easy to do with simply a mini public announcement ad in the local underground newspaper, one of them Doing Business As's thingamabobs) and bestow a Constitutional Law Degree upon myself in order to argue such before some weighty folks.  Figured a great place to start would be the county traffic court next week.
He's not encouraging about the accreditation and exams stuff but says there's an awesome German deli just a block away.

boogerbently's picture

I know nothing.

I see nothing.

I hear NOTHING.

apberusdisvet's picture

Has the Rothschild 757 loaded with gold for the German Court been given permission to take off?

magpie's picture

Don't worry, the Free Syrian Army will shoot it down.

dearth vader's picture

Dutch parliamentary elections - Over the past month, the pro-Europe social democrats made a spectacular recovery in the polls. From 30 seats (of 150) they went down to about 15, and now poll results indicate a possible 35 seats in the new parliament, equal to their liberal opponents, the party of prime minister Mark Rutte.

The Dutch seemingly will vote by their wallets, preferring less austerity. Leaving the euro is becoming less of an issue, as it is pushed by the wrong guy - Geert Wilders.

knukles's picture

Geert Wilders is awesome!
Every country need a politician like that.

Bachmann/Wilders 2012

 

Booyah!

frenzic's picture

Wilders is funded by likud. Beware.

edit blatant spell fail

frenzic's picture

I read that as TPTB jumped into gear. Polls schmols. The dutch are typically governed by a "centre right coalition" which makes sure we perform our vassal duties to serve the empire as it pleases. When I say governed by politicians I naturally mean (joo)bankstas. That "left" wing win will come undone soon after the start of the first round of formation talks as it always does. Some talking heads will not be able to agree on some issue. You know the drill. Oh and left right there is no difference. Politics is there to keep the masses distracted and make them think their vote matters, that they are being represented. That democracy can work wonders even if there is no civilian input nor any kind of meaningful debate whatsoever and all feedback is killed or cut off and left out to dry. It's like a soap opera only less well scripted. The politicians are just there to carry out the bankstas orders, on the double. TPTB are just making sure that pro EU/Dragi fanatics will be "in charge" for "the difficult times ahead", that the first few possible outcomes to be discussed in the formation talks to form a future government will surely guarantee a pro EU outcome. If those fail we get the old "minority" government and that WILL be hmm center right in character and colors, naturally also very pro EU. They can't and won't lose. Get used to it and start to make most cash under the table (a nice place to stack some metals too) so they'll starve. Don't vote either as to delegitimize the process. Well my 2ct anyways.

Edit

fuck it make that guilders, the silver kind.

Reptil's picture

Correct, and I don't know who gave you that down vote, but that person is wrong.

If Wilders gets any power, he'll turn around like a leaf and draw more power from the bank cartel and multinationals. He's a neo-con in disguise, someone who's hunger for power trumps ANYTHING else. He'd not hesitate to erect a "dutch Guantanamo Bay" (his own words).

There is no politician here that protects the interest of the people. NONE are picking up the hot potato; that billions of euros have been transferred away from the dutch public accounts into the coffers of private senior bondholders, and that now (at the cost of the economy) the politicians are going to introduce measures to make the people pay for those "mistakes" (that were just as much planned as this useless "austerity". (not that spending your way out of this (PvdA) is a healthy alternative, that's not my point)
My point is that

NO POLITICIAN WANTS TO SEE THE BANKS AND MULTINATIONAL INDUSTRY (THE "GLOBALISTS") FAIL, AND THEY DO THIS AT THE EXPENSE OF THE PEOPLE WHO KNOW GO OUT AND VOTE FOR THEM.

No one here even knows about the german people's resistance to the ESM, it's not covered by ANY media, it would obviously raise (unasked) questions here, as for this is constitutional or not.

BOTH choices ("austerity" or "stimulus") are non-choices as they both don't adress the core reason for why this european collapse is happening: CORRUPTION and MISMANAGEMENT

The VVD has disappointed me tremendously; non-transparent descision making stuctures (top down), and non-transparent funding structure of the party (against the law and dutch customs). Who has captured the VVD? 21% VAT, and the "Wietpas" to register citizens while they're doing something legal (the Nazis were given "lists" when they occupied the Netherlands in 1940) are not "liberal" (different meaning than "liberal" in the USA) measures, and they pretend to be watching out for the small and medium businesses, but their actions speak the opposite. Add to that the continuous support for a non working weapons platform as is the JSF/F-35 (instead of several european options) and the ridiculous failure that is fission nuclear, and the necessity to do an expensive decommissioning of the Borssele reactor, and you got the old "say what they like, then screw them after the election is over". Two faced snakes. Rutte is a bag of shit.

The one politician that DID look out for dutch citizens got killed by a lone shooter under suspicious circumstances. Pim Fortuyn. Everyone was appalled but no one really dug deeper or honored his political choices. Sounds familiar?

https://en.wikipedia.org/wiki/Pim_Fortuyn

q99x2's picture

Hide the lipstick.

If those circus freaks vote in favor of the people I'm looking up my relatives and moving to the the town that has my family name.

If I had any known affiliation with the word Troika I would not be caught dead in Greece. Or then again maybe I would.

How do you get a constitution? I'm in LA and we need one here. We will forgo the misinterpreting red garbed genuises in favor of Mexican mafia to enforce it.

knukles's picture

17% think it a good idea
22% figure it is kinda
13% asked what they're being asked about again
19% didn't mind
 7%  were inbetween
34% asked why?
55% said it's OK if your mother says it's OK
 9% said her mom said she's a hairy whore
 3% were OK if Mrs. Dingolopolis was home
11% asked what the movie was rated.
80% said eating pork was vegetarinan because pigs eat plants
77% wanted to think about it some more
 4%  thought about it some more
 5%  of the men said it was better than a rub job
14% didn't know what they were talking about
92% said the Greeks should practice sex how they invented it
17% were interested in buying an island
55% said Greeks are foreigners, too
 4% thought ZyclonB was a carney ride

0f the 1,756% responding, none watched the Democratic convention and only 1% figured they were better off than in 1945.

Phroneo's picture

It wouldn't matter even if it was 90%. Unless the Germans storm their state institutions and physically force democracy on their tyrants then they will continue to get screwed over. 

zilverreiger's picture

There has been a development some CDU guy put a new speed trial claim at the court, which could postpone the verdict past wednesday. He wants their opinion now that draghi wants to start to buy bonds. http://www.spiegel.de/politik/deutschland/rettungsschirm-gauweiler-will-...

 

Also on the 12th Netherlands has general elections, judging polls there will be a move to the left, with probably outcome VVD D66 PVDA coalition, and also a chance for a completely left coalition of D66 PVDA SP + ...

knukles's picture

That is so Fucking Useful!
The article is in German for Christs sakes!
That's like Mach Schnell or Booyahbergers...

gggunchi's picture

God forbid you speak or can read a little of the World's second most important business language.