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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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Fri, 06/08/2012 - 12:27 | 2507655 Cognitive Dissonance
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.

Fri, 06/08/2012 - 12:28 | 2507668 Future Tense
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:

Fri, 06/08/2012 - 12:33 | 2507678 Ahmeexnal
Ahmeexnal's picture

India agrees to buy german 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.

Fri, 06/08/2012 - 13:20 | 2507843 AldousHuxley
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.

Fri, 06/08/2012 - 14:53 | 2508239 caconhma
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!


Fri, 06/08/2012 - 16:31 | 2508611 Carl Spackler
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?


Fri, 06/08/2012 - 23:10 | 2509543 FinalCollapse
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!

Sat, 06/09/2012 - 01:46 | 2509707 Olympia
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.

Fri, 06/08/2012 - 20:03 | 2509258 Buck Johnson
Buck Johnson's picture

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

Fri, 06/08/2012 - 22:31 | 2509496 Overfed
Overfed's picture

"Productive people get fucked over and over."


Fixed that for ya'.


Fri, 06/08/2012 - 12:40 | 2507700 Chris Jusset
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.

Fri, 06/08/2012 - 12:43 | 2507710 potlatch
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.




Fri, 06/08/2012 - 12:42 | 2507707 potlatch
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

Fri, 06/08/2012 - 13:30 | 2507890 Harlequin001
Harlequin001's picture

You're joking aren't you?

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

Fri, 06/08/2012 - 14:54 | 2508248 Poundsand
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.

Sat, 06/09/2012 - 04:23 | 2509816 Harlequin001
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...

Fri, 06/08/2012 - 14:57 | 2508256 brooklynlou
brooklynlou's picture

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

Fri, 06/08/2012 - 16:03 | 2508456 potlatch
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

Fri, 06/08/2012 - 12:56 | 2507748 markar
markar's picture

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

Fri, 06/08/2012 - 14:48 | 2508218 Overflow-admin
Overflow-admin's picture

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


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

Fri, 06/08/2012 - 16:15 | 2508550 Carl Spackler
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.

Fri, 06/08/2012 - 18:38 | 2509048 noses
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).

Fri, 06/08/2012 - 12:59 | 2507717 Greyhat
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.

Fri, 06/08/2012 - 14:16 | 2508081 Tramp Stamper
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. 

Fri, 06/08/2012 - 14:38 | 2508179 magpie
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... 

Fri, 06/08/2012 - 15:01 | 2508263 Tramp Stamper
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.


Sat, 06/09/2012 - 02:33 | 2509739 Peter K
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.

Sat, 06/09/2012 - 02:48 | 2509751 Peter K
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.....

Fri, 06/08/2012 - 13:47 | 2507955 Azannoth
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

Fri, 06/08/2012 - 14:58 | 2508262 brooklynlou
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 ...

Fri, 06/08/2012 - 15:11 | 2508292 Azannoth
Azannoth's picture

yes and that's the whole irony about it

Sat, 06/09/2012 - 17:27 | 2510993 Greyhat
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.


Fri, 06/08/2012 - 18:05 | 2508933 The Alarmist
The Alarmist's picture

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

Fri, 06/08/2012 - 20:11 | 2509276 philipat
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.

Sat, 06/09/2012 - 09:15 | 2509986 RiverRoad
RiverRoad's picture

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

Fri, 06/08/2012 - 12:37 | 2507675 Mercury
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.


Fri, 06/08/2012 - 12:40 | 2507702 potlatch
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."




Fri, 06/08/2012 - 12:44 | 2507709 Mercury
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!

Fri, 06/08/2012 - 13:09 | 2507794 Assetman
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.


Fri, 06/08/2012 - 12:33 | 2507677 BlueStreet
BlueStreet's picture

German timing is impeccable.

Fri, 06/08/2012 - 12:35 | 2507682 eclectic syncretist
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

Fri, 06/08/2012 - 13:38 | 2507934 JR
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.

Fri, 06/08/2012 - 18:41 | 2509063 noses
noses's picture

Nur die allerdümsten Kälber wählen ihren Schlachter selber.

Fri, 06/08/2012 - 12:38 | 2507687 Vergeltung
Vergeltung's picture

ueber alles!


Fri, 06/08/2012 - 16:19 | 2508558 Carl Spackler
Carl Spackler's picture

Jawohl, Hauptmann.

Fri, 06/08/2012 - 12:38 | 2507690 Acorn10012
Acorn10012's picture

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

Fri, 06/08/2012 - 12:46 | 2507720 Itch
Itch's picture

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

Fri, 06/08/2012 - 18:41 | 2509065 noses
noses's picture

If he does you deserved it.

Fri, 06/08/2012 - 13:05 | 2507771 mendigo
mendigo's picture

In a battle of will (and wits) its game over mis amigos.
I suspect the Germans already have plan and will make it apparent when its suits them. The do not suffer from the lack of leadership issue they are only looking to optimize the outcome.

Fri, 06/08/2012 - 12:38 | 2507691 Conman
Conman's picture

Europe exploding means one thing for US equities it seems. Rally time , got my dow 13k cap ready again.

Fri, 06/08/2012 - 12:39 | 2507698 potlatch
potlatch's picture

why, its a sunny optimist!  /waves  Hi sunny optimist!

Fri, 06/08/2012 - 12:47 | 2507719 Conman
Conman's picture

Yup, on the bright side journalists get to revise all the articles they wrote in the morning saying "stocks drop on no QE". So its back to "Stocks rise on rumors of more teelcofnrence calls". Same as Wedsnesday. Must mean overtime for them. Economy booster right there.

Fri, 06/08/2012 - 15:57 | 2508445 potlatch
potlatch's picture

So basically your saying, the entire market has been reduced to a silly game of telephone tag

Fri, 06/08/2012 - 12:38 | 2507692 potlatch
potlatch's picture

I agree with the game of chicken stand-off.


Just substitute "face eating" for what the actual collision delta is.

Fri, 06/08/2012 - 12:40 | 2507703 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Bwawk, bwawk, bwawk BWAWK -- CHICKEN!

Fri, 06/08/2012 - 12:41 | 2507704 Dr. Engali
Dr. Engali's picture

Why on earth woud any German want to work until they are 67 and fund a lazy French slackers retirement when they can cross the border and retire at 60? This situation is so screwed up, I could hardly blame the Germans if they said screw you.

Fri, 06/08/2012 - 13:37 | 2507923 Azannoth
Azannoth's picture

Few people in Germany work that long anyway, there are early retirement options and reduced working hours you can go on unemployment for 2 years or medial leave and if all else fails Harz IV you can pretty much retire any time you want to here, sure most people try to work and that's the only difference between Germany and the rest here poeple have a sense of responsibility(at least to some degree)

Fri, 06/08/2012 - 15:18 | 2508310 CuriousPasserby
CuriousPasserby's picture

Not to mention Greeks retiring at 50. If the Germans don't quit the Euro first they are fools.

Fri, 06/08/2012 - 12:43 | 2507708 Al Huxley
Al Huxley's picture

The Germans should just do an end-run around the whole fucking system - retirement age for EVERYBODY is now 20, guaranteed 15 week vacations in the destination of choice for all German citizens, free rent, free food, free utilities and free gas for everybody.  Then go to the ECB and get a bailout to 'tide them over until the economy picks up'.

Fri, 06/08/2012 - 12:47 | 2507721 slackrabbit
slackrabbit's picture

+1000 (inflation adjusted)  Agree.


Fri, 06/08/2012 - 12:53 | 2507738 LawsofPhysics
LawsofPhysics's picture

if by "retire" you mean "become unemployed", i think you are correct.

Fri, 06/08/2012 - 13:00 | 2507759 CrimsonAvenger
CrimsonAvenger's picture

Now THAT would be a black swan.

Fri, 06/08/2012 - 12:49 | 2507712 slackrabbit
slackrabbit's picture


The irony about the whole bail outs is that Germany simply expects everyone for legally follow a prescribed set of rules regarding bailout loans, budget deficits, retirement age etc.

Clearly Spain, Greece and France do not want this - which then leads to the next logical conclusion:

How can there be political union, when each EU country cannot even agree on stick rules for loans, economic policy and budget deficits?

If they cannot – then the next question must be:

Does only Germany really want to be part of the EU? Because clearly the others do not.

If they cant agree on everyone having and following the same rules, then:

How can there  be any Union?.

This is the circular logic currently going around the EU....until either Germany or the markets stop it.



Fri, 06/08/2012 - 13:15 | 2507822 Assetman
Assetman's picture

What the historical collorary here?

Germans look at treaties as prescribed rules to be followed by the letter.

France (and now most of their EU partners) look at treaties as general guidlines, and coloring outside those lines is OK... so long as it's for the 'greater good'.

Fri, 06/08/2012 - 13:25 | 2507861 AnAnonymous
AnAnonymous's picture

Germans look at treaties as prescribed rules to be followed by the letter.


If so, why did they weasel out their way of various treaties?

They have broken the rules as any US citizen, when profitable.

Fri, 06/08/2012 - 13:40 | 2507938 Assetman
Assetman's picture

Because they eventually realize that everyone else is already neck-deep in cheating.

Don't worry... you'll catch on.

Fri, 06/08/2012 - 13:23 | 2507854 AnAnonymous
AnAnonymous's picture

The irony about the whole bail outs is that Germany simply expects everyone for legally follow a prescribed set of rules regarding bailout loans, budget deficits, retirement age etc.


Nope. US citizen rule of law which is selective application of law when it is profitable, toss it when not.

Germany is a US citizen nation. See how they broke the treaty when convenient.

Fri, 06/08/2012 - 13:36 | 2507917 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous, stumbling through his fantasy world, said:

Germany is a US citizen nation.

Only in the delusional fantasy world you inhabit.

For everyone else, Germany is composed of German citizens.

Fri, 06/08/2012 - 14:54 | 2508247 Overflow-admin
Overflow-admin's picture

Stoopid hoomanz... can't recognize they are all the same kind, they seem prefer to create illusory etiquetes like race, citizenship, etho and segregate all themselves ^^

Fri, 06/08/2012 - 12:49 | 2507729 Die Weiße Rose
Die Weiße Rose's picture

Crisis ?

what Crisis ?

The majority of major economic news out of Europe has already been released
Germany posted a better than expected trade surplus of €16.1 billion

everybody else just keeps spending like theres no tomorrow,

on ever more Junk Debt courtesy of the US and UK Central Bank (IMF)

The US and UK is where all this Junk Debt finance started -

no doubt that's where it will end sometime soon...

the US and UK are just as fucked up as Spain and Italy,

the endless devaluation of their own sovereign currencies will soon hit them hard !

there is now no-where left to hide for Geitner and Bernanke...


Fri, 06/08/2012 - 12:56 | 2507747 slackrabbit
slackrabbit's picture

I would watch it, but my 42 inch TV just died.

I wonder If I can get Germany to send me a new one?

Probably not...damn will just have to work or find another facebook to short.

If only I lived in Spain....where they have chocolate rivers... ;- )

Fri, 06/08/2012 - 18:08 | 2508943 The Alarmist
The Alarmist's picture

Hasn't Big O instituted a free-big-screen-TV-for-everybody programme?  Don't miss another episode of American Idle ... Hurry and apply for that JPM-administered SNAP card, and that way you can use the spare change for things that really matter. 

Fri, 06/08/2012 - 13:04 | 2507768 Ahmeexnal
Ahmeexnal's picture

Ahhh...the bavarian fraulein is back.

Those major economic news you speak of are from the euro-MSM outlets.

The reality is quite different.

How's the beer garden?  Giant TV screens for the sheeple to watch eurocup, while drinking chinese beer.

Fri, 06/08/2012 - 13:34 | 2507911 Die Weiße Rose
Die Weiße Rose's picture

no Chinese beer here, Ahmeexnal -

just good old German bavarian Hopfen und Malz Bier

while enjoying a Bratwurst and Sauerkraut, and lots of nice food

and of course the beautiful scenery of the european summer 2012 -

don't be too jealous Ahmeexnal, if you cash in some of your Gold,

you too can enjoy a nice european holiday...


Fri, 06/08/2012 - 14:39 | 2508148 Ahmeexnal
Ahmeexnal's picture

the beautiful scenery of the european summer 2012

Riots, people setting themselves on fire, mothers dumping their newborns at church doors, complete economic find that "beautiful scenery"?

You won't be so happy when that "scenery" reaches you.

Italy (and to some extent Greece) are the only places in Europe with real (millennia backed) culture. Northern europe is basically "americanized".  A vacation in India in on top of my list.  Don't need to cash gold. CHF and my charisma will do just fine.

Fri, 06/08/2012 - 14:15 | 2508077 magpie
magpie's picture

If its Tsingdao, it's probably both and neither.

Fri, 06/08/2012 - 14:14 | 2508071 magpie
magpie's picture

Durchhalten ! Berlin bleibt europaeisch ! (Like those banners of yore)

Fri, 06/08/2012 - 12:57 | 2507743 falak pema
falak pema's picture

Oigarchy world; when thieves fall out its anybody's guess. Who pulls the plug on this mess. US Banksta squid cabal, the German feldmarshall of new Bismarckian world, or the club Med chickens who don't want to get roasted; all the while their own Oligarchs park their money in far off places, in Electronic-money-land. 

If the people's interest was the issue they would burn the Banksta architecture first then fry their TBTF banks and their HF acolytes all in one mega-global-financial gang bang, with the safety nets well in place. But there is nobody there to put this in place. So its the race to the bottom and people's face  deeper in the mud.

Animal farm, and Mustapha Mond of brave new world, DC. Hope he gets grilled along with the Bankstas of his great hatchery, the Thatchery of bigbanganomics. Where Oligarchs rule the roost of London's diamond jubilee crown jewels, the precious real estate of Oil kingdom pharaonic paranoia. 

Fri, 06/08/2012 - 12:57 | 2507750 Sandmann
Sandmann's picture

France deliberately built up Club Med States as a Bloc against Northern Europe to safeguard its Agricultural Lobby. Essentially the corrupt French Agricultural Price Support Schemes of the 1950s were unaffordable without harnessing Germany to pay the bills. Then to increase voting power they brought in Spain and the rest. Look at stupid Britain only brought in AFTER the Agricultural Policy was set in stone to provide yet more Cash for the Farmers - Britain being Europe's biggest food importer. The French even invented a Fisheries Policy as Britain joined to get access to the richest fishing grounds in Europe - now the Spaniards and French fish them dry.

The whole scam was France trying to live on the backls of others and build a European Empire where French was the main language of business inside the EU and the system was modelled on French Bureaucracy. The biggest influence groups inside the EU are French, Greek, Irish

Fri, 06/08/2012 - 14:04 | 2508016 reload
reload's picture

Good points about the importance of the CAP (common agri policy) and its massive advantages for the French. We have been shafted in the UK, but I dispute your claim that we are the biggest food importers. Japan is top of my list, and Australia close behind. Anyway the UK has some of the most efficient farmers in the world (cereals and root crops) where we fail is in the production of meat and dairy produce. When I say fail, I mean we fail to produce the volume we should. This is not because we can not do it, but because the CAP has made us uncompetitive in mass markets. Only small producers of high end products have a chance to make a profit currently. Just ask a British pig farmer why it costs him more to get a beast to market in the UK than it does a Danish, French or German competitor, its because of regulations and tarrifs. Not because he cant produce a good product. So yes we import more than we should, but we should not need to if our farmers were not disadvantaged by the CAP. Arable farmers here making out like bandits though.

Fri, 06/08/2012 - 14:24 | 2508114 Sandmann
Sandmann's picture

Britain being Europe's biggest food importer

I dispute your claim that we are the biggest food importers. Japan is top of my list, and Australia close behind


News to me that Japan and Australia are in Europe

Fri, 06/08/2012 - 14:36 | 2508169 Ahmeexnal
Ahmeexnal's picture

I thought China was the world's top melamine importer.

Fri, 06/08/2012 - 16:39 | 2508642 Carl Spackler
Carl Spackler's picture

and I thought China was the world's top exporter of low-cost sulfur dioxide.

Fri, 06/08/2012 - 14:38 | 2508181 reload
reload's picture

corrected I stand - must read more accurately

Fri, 06/08/2012 - 18:10 | 2508944 The Alarmist
The Alarmist's picture

"News to me that Japan and Australia are in Europe"


Shhhhhh!  This is plan T, the one right after the failure of Eurobonds.

Fri, 06/08/2012 - 14:34 | 2508157 GeneMarchbanks
GeneMarchbanks's picture

So yes we import more than we should, but we should not need to if our farmers were not disadvantaged by the CAP.

That is typical of a country post Empire. Prostitution of the food supply, leaves a nation vulnerable to all kinds of geo-political stresses.

Fri, 06/08/2012 - 14:54 | 2508243 reload
reload's picture

That is typical of a country post Empire. Prostitution of the food supply, leaves a nation vulnerable to all kinds of geo-political stresses.


I agree completely & God knows what deals are done behind closed doors in the EU Commission citadel, out of sight of National voters and unreported. This is what is so fundamentaly wrong with the European experiment, a nations interests can and do get traded away, in secret. The results are announced after the fact and there is no recourse at all if you find yourself marginalised.

Of course the French are very selective about what Euro regulations they bother to impose on their businesses including Farmers, but in UK-land they are imposed rigorously by our ever increasing army of government enforcers, who are viscious in their determination to prove that their worthless, non productive job is in fact vital.  Not much left to be hollowed out now, the UK feels doomed to me.


Fri, 06/08/2012 - 15:01 | 2508268 GeneMarchbanks
GeneMarchbanks's picture

'Not much left to be hollowed out now, the UK feels doomed to me.'

That is because it is. Fear not, you will have company meanwhile enjoy the Olympics.

Fri, 06/08/2012 - 14:05 | 2508017 reload
reload's picture

double - sorry

Fri, 06/08/2012 - 17:30 | 2508811 falak pema
falak pema's picture

The Japs fish the french dry; Chirac's PAC backfired; it created a comfy feeling of agriprotection for France which has admittedly helped the BIG grain producers but not the small guys. But it has totally killed the small industry in France as Chirac/Jospin refused to compete head to head with Germany when Schroeder proposed to France a joint concerted strategy to increase productivity and align wages and TAX policies to create greater Euro harmony at NICe convention in 1999. France refused, Jospin to protect 35 hour weeks work mantra  and CHirac to limit french european zeal to just agri-PAC! They had no vision of things to come! Like all those other club med shills. 

Schroeder went his own way, Eurogroup expanded to 12 to 25 then to 27 all in non fiscal harmony, all in one big money game protected by German dynamism. And France regressed and Germany progressed from 1999 onwards! 

Thank you very very fukking much Chirac. And then we had "Made in USA Sarkozy"....wunderbarrrr Merkozy dictat! ...Schroeder is the man who made the pan German model and the North Gas pipeline ost-politik. Merkel is just playing follow the leader, after Kohl reunited Europe with Mitterrand and then reunited Germany! Kohl-Schroeder did the trick for Germany, until Clinton-Bush-O'bammy blew up the whole first world shooting match in the context of Reaganomics uber-alles.

Now the bubble is coming to fruition. Head for the salt mines! 

Sat, 06/09/2012 - 06:11 | 2509855 Peter K
Peter K's picture

You are correct. The whole EU project was De Gaulle's attempt to harness the German administration machine (effective) to support the French and French designated ruling elites of the new Europe. This was the concept behind the "silken ropes tying down Germany" metaphor. As far as the French farm subsidy, this was the equivalent of the Treaty of Versailles, but in a much less visible form. To this day, the French farmers are viewed as backward, and in need of a farm subsidy. And it's the Germans and Brits that pay for it.

Fri, 06/08/2012 - 13:12 | 2507810 JR
JR's picture

@ Cognitive  Dissonance:  “Looks like the Germans have the world playing into their hands.......again.”

How many times can it be said, but it’s true: The German people are not making these decisions. It’s the Wall Street-connected German bankers. And they will not act for the benefit of the German people but for the benefit of themselves.

The conquerors still rule in Germany; she remains under banking supervision coming from the United States. It’s true the German government is spending money on social programs but it’s coming from agreement with the American-Israeli Empire.

Here is an insightful view of the German-Euro relationship from a German citizen responding to the Global Debt Crisis authored by Panagiotis Traianou, National Liberation Front:

“We have to focuse together on the real enemy. it the moneysystem with their profiteurs.
Here in Germany we werent asked if we want the EURO, we get never asked and cant vote. Everything got more expansive. And our media and education system is not free. we have to learn the history how the conquerer of the war teaches us.”

Writes David Wemhoff in a review of Vincent Philip Munoz’ God and the Founders: Madison, Washington, and Jefferson:

“In 1945, Germany was in ruins. The Americans, with their allies, had defeated the Germans after years of total war, and now it was time for the conquerors to rule…

The proconsul they sent over to govern the conquered Germans was John J. McCloy, Wall Street lawyer, World Bank President, and Chase Manhattan Bank Chairman of the Board. The mission of John J. McCloy was to remake German society into the liberal Enlightenment society known as America. McCloy, as High Commissioner of the occupied land could implement the programs, and monitor their success, needed to do that.

“During the years that followed the conquest, Americans conducted a campaign of psychological warfare and social re-engineering of German society…”

Why then, if Germans are like America’s founders, are their spokesmen international bankers based in Germany?

Fri, 06/08/2012 - 13:28 | 2507883 AnAnonymous
AnAnonymous's picture

The German people are not making these decisions.


And they support them. Merkel had known a rise in popularity as the events unfolded.

Fri, 06/08/2012 - 13:43 | 2507948 JR
JR's picture

And what were their choices? There is polling data and there is voting data…  Merkel's positions in past months in regional elections have been losing heavily.

Obama has had surges in popularity, hardly an endorsement of his policies, but rather a media invention

Fri, 06/08/2012 - 13:15 | 2507817 q99x2
q99x2's picture

The German people are the most favored slave class of the banksters.

Fri, 06/08/2012 - 16:42 | 2508649 Carl Spackler
Carl Spackler's picture

Of course the Germans are, because they always pay back what they borrow.

Nobody wants deadbeat customers except for Ben Bernanke and the European Central Bank, of course.

Fri, 06/08/2012 - 13:18 | 2507835 Treeplanter
Treeplanter's picture

Merkel is aware German voters are fed up.  And the Germans seem better at math than the rest.  They know bankruptcy is the most effective bail out.  Francois is due a wake up call.

Fri, 06/08/2012 - 13:27 | 2507874 slewie the pi-rat
slewie the pi-rat's picture

no one wants to kill cock robin (the EU)

this will go on and on b/c no one will take the EU down or leave voluntarily

basically, the EU and the SNB are saying:  we're pooped!  china?  US?  japan? 

i'm not sure...  they're all trying to fund our own check-in-da-mail dealies, but the fungibility will help everyone...

i'm pretty sure the arab oil peeps are yer best bet, same as that deal forDexia re-capex you nuked...

they have a kinda "money" that even the germans can't touch

when the bullshits starts walkin, the money will start talkin

until then, enjoy the cheese, wine, music, sex, and sunshine, BiCheZ! 

Fri, 06/08/2012 - 13:34 | 2507912 bugs_
bugs_'s picture

ve have vays of losink our nerves

Fri, 06/08/2012 - 13:37 | 2507927 wagthetails
wagthetails's picture

maybe Germany shows up to the next meeting and pull out of the EU.  boom.  part of me would love to see this.  unfortunately we are all actors in this tragedy. 

Fri, 06/08/2012 - 13:46 | 2507960 Assetman
Assetman's picture

unfortunately we are all actors in this tragedy. 

And, unfortunately, we were all schooled at the William Shatner School of Shakepearean Theatrics.

Fri, 06/08/2012 - 13:40 | 2507932 Abraxas
Abraxas's picture

I figured it all has been decided long ago, we are just not updated yet. It'll go this way and that way in a meantime, and we will ooh and aah over many things, but I sense there is a plan, and that everything is working exactly according to the plan.

Fri, 06/08/2012 - 13:49 | 2507968 insanelysane
insanelysane's picture

Germany is going to walk away from the Euro.  That will occur no later than US Labor Day.

Fri, 06/08/2012 - 15:19 | 2508319 Not Too Important
Not Too Important's picture

I've been coming here for four years, and it's all really very simple.

I don't think the Rothschilds own everything, but let's just use them as representing the small group that really does run things. The British royal family are German, the US Federal Reserve was set up by a German, somehow the whole thing leads back to Germany. But I digress.

In every situation, in every economic catastrophe, ask yourself, what would be the best outcome for the Rothschilds? And bingo, that's exactly what happens. Every single time. Bailouts, crashes, trillions of whatever currency the West uses. Every single time, they make out.

There's no need to read a crystal ball, or throw dice. They win every single time.

Cause a crash (they control the markets). Print more money (they control the printing presses). Buy everything up. Somebody causing trouble? Send in someone's military (they control the politicians that make these decisions). Crash the economy. Buy everything up. Repeat and repeat.

Genocidal psychopaths with staffs of PhD's. It's not hard to figure this stuff out.

Fri, 06/08/2012 - 15:26 | 2508345 magpie
magpie's picture

You only need a photocopier and old newspapers for a Phd in Germany these days, just saying...

Fri, 06/08/2012 - 13:49 | 2507969 Olympia
Olympia's picture

Germans plunge Europe into a new Medieval Era.

Are they ready to take that risk ?

It was Germany that took huge loans from the American FED. It was Germany that put the markets up to buying ownership shares of the European Central Bank, which has burdened the States with sins. It was this State that lured the rest of the Europeans into a dissolute life so that it can pass the burden of its debts, hence its own sin to them. The current epidemic of debt crisis has begun from Germany, it is just that it kept its disease a secret and at the expense of everybody else, and now that it is in a better shape, it has gone hunting in order to take advantage of the disease it itself had created. The first State to have sickened has gone hunting for the one who was most weak in dealing with the disease, and that was Greece. If Germany had not been over-indebted, the European states would have never been vulnerable to the markets’ attacks.  If Germany had not been over-indebted the European states would have never been forced to mortgage their existence so that Germany’s bosses can get their money.


The Eastern gates of Europe at risk: How Northern Europe shoots itself in the leg

Fri, 06/08/2012 - 14:08 | 2508046 Lednbrass
Lednbrass's picture

Put down your crack pipe and go lay on the beach while your country disintegrates. Quit blaming everyone else- you had a good time partying on somebodey elses money and now its over.

Fri, 06/08/2012 - 14:13 | 2508068 Olympia
Olympia's picture --------------------------------- By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...

Fri, 06/08/2012 - 18:59 | 2509105 noses
noses's picture

Oh yes... The poor Greek people. They were forced to accept all the money they got when sneaking into the common currency by having American banks helping them to pressure-cook their books until they were soft as white goat cheese. I guess nobody wants to be caught lying and stealing but the show they're putting up now is really awful. But I don't remember one example from history classes where the Greek ever took responsibility for their actions and behaved like men.


Stop whining.

Sat, 06/09/2012 - 01:43 | 2509703 Olympia
Olympia's picture

I guess you have never read a history book. But that's not a problem. People like you will keep on walking and sleepin in the mud.

History shall repeat itself in a far greater scale and therefore the benefit for the leading roles shall be much greater. If ancient Greeks won the battle against the barbarity of the East in favour of Europe, then modern Greeks are those who are meant to win the battle against the barbarity of both Eastern and Western world in favour of the human kind.

Fri, 06/08/2012 - 18:54 | 2509101 noses
noses's picture

Go fuck a goat to clear your mind. And stop spending other people's savings by taking credits you'll never by able to repay.

Fri, 06/08/2012 - 14:06 | 2508034 magpie
magpie's picture

I realize i am now in the Spain crashes and burns camp: with all that Bilderberg chatter and Soros setting up shop there (a refuge once his puppet is voted out).


Fri, 06/08/2012 - 14:41 | 2508195 sbenard
sbenard's picture

Cute chickens!

Fri, 06/08/2012 - 14:44 | 2508207 Joe A
Joe A's picture

Aren't we just one big happy family in Europe? NOT.

Fri, 06/08/2012 - 19:01 | 2509108 noses
noses's picture

We really are. Nobody can pick his family, it is forced upon them. But at least one can pick his friends.

Fri, 06/08/2012 - 14:55 | 2508223 MarcusLCrassus
MarcusLCrassus's picture

Use the multifaceted approach.  We can cut the legs out from under the German banks themselves. 


The German people themselves are getting very restless about their financial destiny being decided by a bunch of unelected bureaucrats.  The German Pirate Party is becoming very very active.  All we need to do is get even a small percentage of Germans talking about repatriating the German gold that is being held by the US in New York City back to Germany.  This will bring the whole banker's paradise that we are stuck in now come crashing down around them. 


Get the German people to demand their gold back and we will see bankers heads explode in fear and be that much closer to ending the banker kleptocracy.  This can easily be done with the right viral marketing campaign.  How many Germans actually trust US banks to hold their gold any longer?

 I haven't seen anything strike more fear into the banker's hearts than the suggestion of this a month or two ago, but there hasn't been any follow up.  YET. 

Tl;dr: sweep the leg. 

Fri, 06/08/2012 - 16:22 | 2508574 JR
JR's picture

Fantastic strategy. Keep on rolling!

Fri, 06/08/2012 - 15:21 | 2508327 trilliontroll
trilliontroll's picture
  Treaty of Versailles  (signed 28 June 1919) "... Article 231

The Allied and Associated Governments affirm and Germany accepts the responsibility of Germany and her allies for causing all the loss and damage to which the Allied and Associated Governments and their nationals have been subjected as a consequence of the war imposed upon them by the aggression of Germany and her allies.


(time to meet again  there?)
Fri, 06/08/2012 - 15:24 | 2508339 magpie
magpie's picture

Let"s not forget Trianon and Lausanne either 

Sat, 06/09/2012 - 02:19 | 2509720 Peter K
Peter K's picture

Excellant observation. If we look at the ToV as a transfer union, we can "almost taste" the future progression (linear I might add) from the present day events to the future outcomes. No wonder they say history has a tendency to repeat itself. 

Sat, 06/09/2012 - 04:41 | 2509822 boattrash
boattrash's picture

Agreed! Let the EU fight it out themselves. Might be fun to watch a fuckin war that we're NOT in for a change.

Fri, 06/08/2012 - 16:33 | 2508618 falak pema
falak pema's picture

Like I said, when thieves of first world fall out...

Fri, 06/08/2012 - 18:32 | 2509023 pussum207
pussum207's picture

"Then again, there's always another option: having the French work harder."

Joking, right?

Fri, 06/08/2012 - 19:10 | 2509134 noses
noses's picture

I've spent 24 hours on a bicycle last Saturday travelling across 400km of northern France and I've seen quite a few people out there working during the entire night. I knocked at a boulangerie at 3 in the morning and got fresh croissants.

What kind of hard work have you ever done yourself? Moved your office chair around?

Sat, 06/09/2012 - 02:20 | 2509723 Peter K
Peter K's picture

For a world obsessed with not judging people according to stereotypes, all I can say is that all stereotypes are not equal. How sad:(

Fri, 06/08/2012 - 19:50 | 2509226 The Age of Usef...
The Age of Useful Idiots's picture


Bollocks. More self-serving bs. A Bloomberg report which looked at Bank of International Settlements data revealed that German banks had lent more than 700 BILLION to the European periphery which they then offloaded on EUROPEAN TAXPAYERS within 2 years. That's why Merkozy insisted on kicking the can down the road and refusing to accept a haircut to Greece in the very beginning of the crisis. It warrants a long repost because the truth is that German and French banks gamed the system to their advantage and now European taxpayers everywhere are left holding the bag, all the while the politicians invented narratives that keep looking for scapegoats elsewhere, since we all know that banks do god's work and are not responsible for their investments, so better come up with something, anything, to conceal the fact that they needed a STEALTH bailout at taxpayers' expense everywhere. I'm sorry for all those who either buy the self-serving morality tale of the 'profligate' periphery or misinform deliberately, but here is the truth, and how it happened in all detail. Maybe Zero Hedge will run this story, because this is mindboggling and a true outrage.



Hey, Germany: You Got a Bailout, Too

"In the millions of words written about Europe’s debt crisis, Germany is typically cast as the responsible adult and Greece as the profligate child. Prudent Germany, the narrative goes, is loath to bail out freeloading Greece, which borrowed more than it could afford and now must suffer the consequences.

Would it surprise you to know that Europe’s taxpayers have provided as much financial support to Germany as they have to Greece? An examination of European money flows and central-bank balance sheets suggests this is so.

Let’s begin with the observation that irresponsible borrowers can’t exist without irresponsible lenders. Germany’s banks were Greece’s enablers. Thanks partly to lax regulation, German banks built up precarious exposures to Europe’s peripheral countries in the years before the crisis. By December 2009, according to the Bank for International Settlements, German banks had amassed claims of $704 billion on Greece, Ireland, Italy, Portugal and Spain, much more than the German banks’ aggregate capital. In other words, they lent more than they could afford.

When the European Union and the European Central Bank stepped in to bail out the struggling countries, they made it possible for German banks to bring their money home. As a result, they bailed out Germany’s banks as well as the taxpayers who might otherwise have had to support those banks if the loans weren’t repaid. Unlike much of the aid provided to Greece, the support to Germany’s banks happened automatically, as a function of the currency union’s structure.

How It Worked

Here’s how it worked. When German banks pulled money out of Greece, the other national central banks of the euro area collectively offset the outflow with loans to the Greek central bank. These loans appeared on the balance sheet of the Bundesbank, Germany’s central bank, as claims on the rest of the euro area. This mechanism, designed to keep the currency area’s accounts in balance, made it easier for the German banks to exit their positions.

Now for the tricky part: As opposed to the claims of the private banks, the Bundesbank’s claims were only partly the responsibility of Germany. If Greece reneged on its debt, the losses would be shared among all euro-area countries, according to their shareholding in the ECB. Germany’s stake would be about 28 percent. In short, over the last couple of years, much of the risk sitting on German banks’ balance sheets shifted to the taxpayers of the entire currency union.

It’s hard to quantify exactly how much Germany has benefited from its European bailout. One indicator would be the amount German banks pulled out of other euro-area countries since the crisis began. According to the BIS, they yanked $353 billion from December 2009 to the end of 2011 (the latest data available). Another would be the increase in the Bundesbank’s claims on other euro-area central banks. That amounts to 466 billion euros ($590 billion) from December 2009 through April 2012, though it would also reflect non-German depositors moving their money into German banks.

By comparison, Greece has received a total of about 340 billion euros in official loans to recapitalize its banks, replace fleeing capital, restructure its debts and help its government make ends meet. Only about 15 billion euros of that has come directly from Germany. The rest is all from the ECB, the EU and the International Monetary Fund."

Better Prepared

Germany’s changing financial exposure has major implications for its role as a leader of Europe’s response to the crisis. Before Germany’s banks pulled back their funds, they stood to lose a ton of money if Greece left the euro. Now any losses will be shared with the taxpayers of the entire euro area -- particularly France, whose banks still have a lot of outstanding loans to Greece. Perhaps this is what some German officials mean when they say that the euro area is better prepared for a Greek exit.

Ultimately, though, the cost of letting Greece go would come home to Germany. If bank runs and market turmoil forced Portugal, Spain, Italy and others out of the euro area as well, the losses could wipe out much of the capital of German banks. Not to mention the longer-term damage the euro breakup would do to the exports that drive Germany’s economy, and the potential demise of a European project designed to prevent a repeat of the horrors of two world wars.

To prevent such an outcome, with or without Greece, Germany will have to do everything it has so far refused, and more. This would include allowing the ECB to stand behind the debt of sovereigns. The euro area also needs a mechanism that would transfer money to economically troubled countries just as automatically as the region’s payment system bailed out Germany -- an element economists have long said is crucial to making the euro area a workable currency union. As we have advocated, a joint unemployment insurance fund could be a first step toward such a fiscal union.

As German Chancellor Angela Merkel considers the next step in the euro crisis -- one that could help the euro area return to growth or, alternatively, risk the survival of the entire currency union -- she should keep in mind that her country is indebted to the euro system as much as Greece is.




Stop buying all the propaganda and face reality: The taxpayers everywhere are getting screwed to bailout the finance sector, and unless this kind of self-serving bs that guys like the author serve is not juxtaposed mercilessly to reality, it won't stop.

Sat, 06/09/2012 - 03:48 | 2509800 macholatte
macholatte's picture


May I suggest that the key to all of it is here:

Let’s begin with the observation that irresponsible borrowers can’t exist without irresponsible lenders.


What has been done in the past 3 years to put a leash on this dog? Nothing?

Do NOT follow this link or you will be banned from the site!