A Game Of Euro Chicken From The German Perspective: "Playing Until the Germans Lose Their Nerve"

Tyler Durden's picture

The following editorial from Spiegel has to be reposted in its entirety because it really captures the current situation, from a German perspective, clearly, concisely and completely. It also frames quite closely what we said 11 months ago in "The Fatal Flaw In Europe's "Bazooka" Bailout: 82 Million Soon To Be Very Angry Germans, Or How Euro Bailout #2 Could Cost Up To 56% Of German GDP"

Playing Until the Germans Lose Their Nerve

A commentary by Jan Fleischhauer 

For Germany, being part of the European Union has always included an element of blackmail. France has been playing this card from the beginning, but now the Spanish and the Greeks have mastered the game. They're banking on Berlin losing its nerve.

France's newly elected Socialist government has just decided to lower the retirement age to 60. From now on, no Frenchman will be forced to work any longer just because it might help kick-start the country's flagging economy. And there's no way the French are going to work as long as their poor fellow Europeans in Germany, whose government is obliging them to labor and toil until age 67.


Blessed France, where the ruthless laws of the economy lose their ability to frighten people bathing in the eternal sunlight of socialism. Granted, this grand nation doesn't produce enough children to guarantee the prosperity of its inhabitants into old age. But in France, something that would elsewhere be viewed as a serious demographic problem demanding tough attention is seen as a mere misunderstanding that the strong arm of the president can simply dispel with the stoke of a pen, should he so desire.

OK, things aren't quite that easy, even for François Hollande, the freshly minted sun king of France's Fifth Republic, and his fellow brothers-in-arms. At least they understand enough to know that economic problems can't be solved by merely kicking them down the road. But, luckily enough, those in the Elysée Palace can also still rely on the willingness of the Germans to work hard. And it's there that we come full circle.

Splitting the Bill

We've now reached a phase in the euro crisis when everyone is trying to feather their own nest at someone else's expense. Hollande is campaigning to have the European Union help the Spanish rehabilitate their banks without involving itself in their business dealings. But, in doing so, he's much less focused on Spain's well-being than on France's. Once the principle stating that countries can only receive financial assistance in return for allowing external oversight has been contravened, one is left with nothing more than a pretty piece of paper to insure against the vicissitudes of economic life. And, of course, the next banks that will then be able to (and presumably also will) get a fresh injection of cash straight from Brussels are the ones in Paris.

Sigmar Gabriel, the head of Germany's center-left Social Democratic Party (SPD), has already called Hollande a friend. But Franz Müntefering, the wise party elder, has just warned his party colleagues not to sing the French president's praises too loudly. The old fox knows when he's standing face to face with someone who only has his own interests in mind. Indeed, despite all his calls for European solidarity, most of Hollande's proposals are ones that others will have to pay for. Someone is obviously going to have to be responsible for all the social programs the French government is concocting. And why not the nation whose people are viewed as particularly hardworking and dependable by an overwhelming majority of the people surveyed in a recent poll?

Hollande's policies depend on foreign creditors being willing to lend him the necessary funding, but their read on things differs from that of the domestic electorate. Since they're worried about whether they'll ever see their money again, they're demanding higher risk premiums. However, another path to fresh capital with cheap conditions leads to the savings of Germans -- which also explains why the French government has been so badger-like in its championing of euro bonds and, more recently, a banking union.

Then again, there's always another option: having the French work harder. But Hollande would prefer not to ask that much of his countrymen.

Fears of German Hegemony

French foreign policy has always been plagued by an obsessive fear of German hegemony over Europe -- and the euro was supposed to be the way to prevent it. It's well-known that French President François Mitterrand made his approval of German reunification contingent on German Chancellor Helmut Kohl's acceptance of the common currency.

Seen in this light, the process of communalizing the debt of the EU's members states brings to full circle a project that the French have always viewed as something directed more against Germany than at uniting the Continent. Nicolas Sarkozy, Hollande's predecessor, believed that the best way to pursue this traditional goal was by using the novel approach of fostering a sense of solidarity with German Chancellor Angela Merkel. But Hollande is returning to the tried-and-true method of weakening the Germans by undermining their economic strength.

The next stage in the crisis will be blatant blackmail. With their refusal to accept money from the bailout fund to recapitalize their banks, the Spanish are not far from causing the entire system to explode. They clearly figure that the Germans will lose their nerve and agree to rehabilitate their banks for them without demanding any guarantee in return that things will take a lasting turn for the better.

Playing Hardball Among Supposed Friends


The next test of the resolution of Europe's donor nations will come from the Greeks. As chance would have it, I was recently standing next to the foreign minister of a country that is inclined to be friendly with Germany. If I understood him correctly, he said he firmly expects that, after the election on June 17, the Greeks will bargain with the other EU countries to see what it's worth to them to see Greece abandon the euro. The Greeks no longer have much to lose; but their EU neighbors -- and particularly the Germans -- still do. This discrepancy will determine the price to be paid.

Germans have always expected that being part of a united Europe meant that national interests would recede into the background until they eventually lost all significance. One recognizes in this hope the legacy of political romanticism. Indeed, only political simpletons assume that when people in Madrid, Rome or Paris talk about Europe, they really mean the European Union.

But, as one can see, it's hard to liberate Germans from this particular form of herd mentality -- even when they're the leaders of the SPD.

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Cognitive Dissonance's picture

Looks like the Germans have the world playing into their hands.......again.

Never let a crisis go to waste.

Remember folks. Question everything........especially that which appears to be the most obviously unquestionable.

Future Tense's picture

Good interview with Marc Faber discussing the "clowns" running the central banks, the bubble in US treasuries, and specific stocks he likes:


Ahmeexnal's picture

India agrees to buy german bonds....in exchange of having 350 tons of toxic sludge sent from Bophal to Bavaria:



A German environmental agency will fly more than 350 tonnes of toxic waste from the Bhopal factory in India to Germany for disposal, it was announced on Friday.

AldousHuxley's picture

Productive German people get fucked over and over.


Fucked over by British and French.

Fucked over by Jews.

Fucked over by Hitler.

Fucked over by lazy southern Europeans.

caconhma's picture

Germans are indeed fucked up:

- So called German banks are owned by the World Zionist Banking Mafia

- German political leadership is a traitor to German people and their national interests

- Historically, German leaders too often were stupid dreamers. Hitler wanted to be friendly and to have close relationships with British even England was ran by Jewish bankers. He indeed was a very naive and stupid person.

- Germans took responsibility for the phony Holocaust story even they did not have to. Did anybody see extermination gas-chambers? America would not have a chance to stop Stalin from taking over Europe without a German help. The West German leaders had all the trump cards and they did not call the American & British bluff.

Germany future is not with their historical enemies (America, Britain, and France) but rather with new emerging power like China, Russia, Iran, Brazil, etc.  The only question:  how far are German people ready to go down before revolting?


As for a New World Order “managed” by the Zionist Central Banking Mafia, the Soviets have tried to have the Central planning economy and it did not work leading to the collapse of the Soviet Union. Do you really expect that the Zionist Central Banking Mafia will do any better? After all, regardless of Stalin and Mao sadism and atrocities, people just stop working making the collapse inevitable!


Carl Spackler's picture

"Historically, German leaders too often were stupid dreamers..."

While there may be some truth to this statement, your limited citing of German history, which is much, much, much more than just the Reich under Hitler, undercuts your observation.

What about Otto von Bismarck and the Hohenzollerns, or the leaders of the Holy Roman Empire?


FinalCollapse's picture

Caco - I saw Auschwitz and three other horrible concentration camps. There are cyclone B gas showers, ovens to BBQ dead or alive, mountains of children hair and shoes - you fucking moron!

Olympia's picture

…Germany betrayed Europe once again. Germany handed all the European countries over to the Jewish loan sharks, by naively believing that this way they would let Germany free. Germany put the European family at the “target” of the “markets” and it is collecting profits every time one of its members gets “executed”. The loan sharks who pretend to be the “hunters” are shooting safely in the European “hen house” because Germany has managed to “raise walls around” Europe. One after the other, Europeans are destroyed so that Merkel can pay the stupid and artificial German debts to the loan sharks. 

As in all previous instances, once again its “fairy tale” is extremely misleading. Nazi Germany who used to destroy Europe in the name of the Greek ideals, does the same thing today. The surrendered, corrupting, competitive after receiving subsidies and extremely anti-European Germany pretends to be the unrivalled European power that fights for the European unity and against the corruption. This country that took advantage of the unification to serve its national interests, requires from the other countries to sell themselves out in the name of this unification. This country that even today keeps corrupting anyone around it, it threatens the corrupted ones. It “vomited” over a whole continent and now it is looking for the “spot” on its victims to punish them.


Nowadays, Germany raves on an everyday basis against Greece. The accusations of the Germans against the Greeks are on the agenda. Lately, the word “Griechenland” should be by far the most used word in the German political speech. German politicians –and not just them—make accusations against the Greeks on an everyday basis. They accuse the Greeks even in the most dangerous and unjust way regarding the collective responsibility. They accuse them using the same racist rhetoric that they used in the past against the Jews and this is what condemned them in the minds of the people all over the world. After apologizing hypocritically for a million times, they came back with their familiar characteristics. As soon as they regained their powers, they started again the same old games …”Greeks” are useless, lazy, thieves etc.

Buck Johnson's picture

I want to say no way but you may be right.

Overfed's picture

"Productive people get fucked over and over."


Fixed that for ya'.


Chris Jusset's picture

According to the article, 3 key concepts will govern the outcome of the Euro collapse:


1. Blackmail

2. Playing chicken; and

3. Feathering one's nest.

potlatch's picture

i enjoy treachery and drag racing as much as the next guy; but i hate nests.  they remind me of the Bastille.




potlatch's picture

you have neglected to include the tail that is always at the end tho:


The Germans will just end up managing to convert the toxic sludge into a rather tasty and paradoxically healthy new form of bratwurst.


they are pro like that

Harlequin001's picture

You're joking aren't you?

They're going to put it in a shell and fire it at France...

Poundsand's picture

Thought that was funny until I realized that the Germans really don't even have to fire a shell at the French, just point the guns in their general direction and that should suffice.

Harlequin001's picture

You don't want to do that, you'll have millions of prisoners on your hands who all want to dine out on Fridays...

brooklynlou's picture

... or dispose of it in a lime pit or burn it off in an oven. They're neat like that ...

potlatch's picture

downright thrifty, even




this site is so often such a refeshing ass-kicking place.  Nice to see posts and threads and articles, to stuff that makes even *half* sense. 


Why, some days -- rarely, mind you -- I even feel *ok* after leaving here.  Oh dear, I've just exposed myself.  Fortunately this is all just an electronic transation, a floating signifier of the highest order, or as Lacan called it, "le petit a".  Wait a sec....... shit, they mutherfuckers repo'ing the car agin brb

markar's picture

Isn't that the same toxic waste  on the Fed balance sheet?

Overflow-admin's picture

FLYING??? Toxic C-5 Galaxys on their way!


Next time, Fukushima cores sent to France by air...

Carl Spackler's picture

Why would they fly it?

Why not ship it over the seas?

The cost of air transport is massive for this weight.

noses's picture

Actually *this* is quite a good deal for both sides. Germany has a safe processing facility for that kind of chemical waste that is sadly underused (because European companies don't produce this class of toxic waste anymore as it has been forbidden for years).

Just the same, Germany is sending its radioactive waste to France for processing (where it is turned into bonds for pension funds so the people there can retire at 60).

Greyhat's picture

Legion Condor took down the Spanish camicaze plane... :-)


"Spain is expected to ask the euro zone for help with recapitalizing its banks this weekend, sources in Brussels and Berlin said on Friday... If a request is made, Spain is expected to ask for help from the euro zone's 440 billion euro bailout mechanism, known as the European Financial Stability Facility."



They were told via Reuters what to ask for. If they dont ask now, they are broke... We didnt forget how to play hardball.

Tramp Stamper's picture

Spain is actually doing the right thing for a change, either the ECB recapitalizes the banks directly or let the banks in Spain and the rest of the EZ start blowing up.  But Spain will not run the money through the Spanish Govt first so it  can not be used as a reason for austerity on the people like it was for Greece. 

magpie's picture

Maybe i've missed a few weeks of news coverage, but a)does Spain actually need all of its banks 2) where's the bad nay evil bank - been waiting for that part of the playbook, but obviously we are taking shortcuts here - or stepping on the accelerator intentionally... 

Tramp Stamper's picture



What I am trying to say is that there is a hidden agenda in all this.  When the US bank bailouts were needed the FED sent money directly to the banks.  The ECB (the FED of EZ) should be able to directly fund banks in any country of the EZ but it wont. Why?  My theory is they want to give it to the Spanish Govt and let them disperse it to the banks.  By doing this, the Spanish Govt is held responsible to repay to the ECB and can tax the people more if necessary to pay them.  If the ECB lends to banks directly the risk is higher.


Peter K's picture

Exactly. But this situation is due to the manner in which the EZ is structured. ECB can not fund governments, and the sovereign Central Bank is the intermediary for the sovereign banks. In other words, the legal framework does not allow the ECB to bail out a countries banks directly.

Peter K's picture

The Greek Neo National Socialist/Communist fight video has started me thinking about the entire concept of European solidarity as per the Germans pre WWII and now.

In Hitler's case, he was very European, and wanted a united continent as the bulwark agianst the Soviet menace. When his allies encountered difficulties, he would help. Think of the help he provided Franco by sending the Condor Legion to Spain to quell the Soviet inspired uprising. He helped Il Duce in Greece, when the Italians overextended themselves. This act delayed Operation Barbaros, and left the German Army exposed to the harsh winter of '41, which in turn turned the tide of the war effort. He then even rescued Mussolini (the primary cause of the German Army's problems post '41) from the communist partisans via the Skorzeny mission. The term that comes to mind here is "good european".

And now contrast the above with the Soviet era East German haus frau who inhabits the chancllory. Definately not a PanEuropean in the classical German understanding of the word.

Just sayin.....

Azannoth's picture

Germany is going to get thrown under the Bus the same way as they did after WW1 and WW2, the people here are simply to good natured to rebel, and no, throw all your stereotypes and everything you where taught in school about history out the window Germany(even under Hitler) wanted those wars like you would want to be sexually molested by your stepfather, they got forced into in by a certain un-named ethnic group / race of (sic.) people

brooklynlou's picture

This is Germany 4.0. They only way they get thrown under the bus is if they first get the contract to build the bus ...

Azannoth's picture

yes and that's the whole irony about it

Greyhat's picture

You shouldnt sell us short. :-)

Austerity until the last looser went out of the Euro. After that we could rename it back to Mark.


The Alarmist's picture

The worst part is that they are willing to provide no-recourse vendor financing ... it just doesn't make sense.

philipat's picture

If Merkel wants to get re-elected, she doesn't have much "Wiggle room". The German people overwhelmingly are against transferring their savings to Club Med without the vacation thrown in. Can't think why.

RiverRoad's picture

Germany has a hell of a price to pay for all the fun they've had dancing with the Devil.

Mercury's picture

It's almost like the rest of Europe hasn't learned anything re: Germany during the 20th century.

But instead of re-militarizing maybe Germany will simply decide to retire from the international harmony business and sell their EU parnership position to the Russians.

Meet the new piggybank Pedro.


potlatch's picture

"But instead of re-militarizing maybe Germany will simply decide to retire from the international harmony business and sell their EU parnership position to the Russians."




Mercury's picture

You’ll notice in the last section that the Iberian Peninsula is now listed under "collateral".

Well, I’m sure you all are going to get along just fine. Buenos días!

Assetman's picture

That is brilliant... but unfortunately, the Germans will need to take their number behind the Greeks.

Putin would just LOVE to backstop Greece in exhange for a little Euro blackmail.


BlueStreet's picture

German timing is impeccable.

eclectic syncretist's picture

It's not like it hasn't been seen before.


"This institution (the central bank), having no principle but that of avarice, will never be varied in its objective ... to engross all the wealth, power and influence of the state." William Findlay

JR's picture

It’s amazing to me how some Americans mock the German people when they try to exercise independence, when these American sheeple are supporters of the same tyrants who control the American economic and political systems, i.e., Orwell’s pigs who’ve taken over the farm house.

noses's picture

Nur die allerdümsten Kälber wählen ihren Schlachter selber.

Acorn10012's picture

I'll side with the hard-working chap who lives within his means.

Itch's picture

Even when he's goose-stepping all over your face?

noses's picture

If he does you deserved it.