Is German Anger Finally Coming To A Boil? Even Local CEOs Say Time To Exit Euro May Have Arrived

Tyler Durden's picture




 

It would appear that the German public (and political class to some extent) are beginning to see the European project in the same manner as we described back in July. As the increasing burden of saving the eurozone from its own excess falls on the shoulders of every Tobias, Dirk, and Heike taxpayer in Germany, even industry leaders, such as Wolfgang Rietzle, the CEO of Linde, this weekend according to Reuters, are suggesting a line in the sand has to be drawn and that "if we do not succeed in disciplining countries then Germany needs to exit." This has been very much a view we have held for months now that instead of the periphery limping away one-by-one, the very core of the foundation will simply decide enough is enough or as Reitzle notes (among many other critically insightful comments) "the willingness of countries to reform themselves is abating if, in the end, the European Central Bank steps in." This morning Germany's FinMin Schaeuble added to the potential separation chatter with his comments, via Bloomberg:

  • *SCHAUEBLE SAYS ECB AS LENDER OF LAST RESORT WOULDN'T CALM MKTS
  • *SCHAEUBLE SAYS JOINT EURO REGION BOND SALES NOT A SOLUTION

Hardly reassuring given the dreams of every GGB owner and BTP-exposed insurance company are banking on the ECB cranking the presses to 'secure' nominal returns in the real world. The EURUSD has opened down 40 pips or so on a slow Sunday afternoon as we remind hopeful investors (and the German public) of our comments from last July (which seem even more prescient now with the AAA downgrades and increasing reliance on EFSF and ESM mechanisms placing more burden explicitly on German taxpayers and "in doing so may have jeopardized anywhere between 32% and 56% of its entire annual economic output".  

Reuters: Linde CEO says Germany Should Mull Euro Exit

Germany should consider leaving the euro if efforts to impose fiscal discipline upon indebted euro zone countries fail, the head of industrial gases firm Linde (LING.DE) told German weekly paper Der Spiegel.

 

"I fear the willingness of crisis countries to reform themselves is abating if, in the end, the European Central Bank steps in," Linde's chief executive Wolfgang Reitzle was quoted as saying.

 

"If we do not succeed in disciplining crisis countries, Germany needs to exit," said Reitzle who was previously a board member at carmaker BMW (BMWG.DE) and head of Jaguar and Land Rover.

 

Asking Germans to pay more than 50 percent taxes to help fund other euro zone countries will erode the will of the German electorate to support rescue measures, Reitzle said.

 

Although this scenario is not desirable, he felt that German industry would survive working in a new currency.

 

"Of course it would lead the new currency - Deutschmark, North-euro or whatever it is called - to appreciate in value. But it would be by a lesser amount than feared," Reitzle said.

 

"Although this would lead to higher unemployment in Germany because exports would take a hit, pressure would increase to become more competitive."

 

Reitzle said the euro zone is unlikely to break up completely but Greece is not in a position to service its debt.

 

"The country is not in a position to restructure itself in such a way that it can remain in the currency union," Reitzle said.

 

"In the medium term Greece needs to exit. And the writedowns on Greek debt will not be between 50 to 70 percent, but in the end will be written down by 100 percent," Reitzle said.

 

So long as Greece remains in the euro it needs to be supported. "All in all this is a 500 billion-euro problem," Reitzle said.

 

Structural reforms need to continue elsewhere in places like Italy too, Reitzle said.

 

The year of destiny for the euro is not 2012, but three to four years down the line, Reitzle said.

 

Upon being asked whether Linde has a plan B to cope with a complete break-up of the euro zone, Reitzle said 'no'.

 

"Even if we had a recession for years in Europe, it would only impact 30 percent of our revenues," he added.

 

As the ESM is accelerated and deposits/investor-cash flood into German banks and bunds, the risks of subordination of existing sovereign bond holders and devaluation from non-German-euro-holding deposits is perhaps too much to bear for investors/savers and leaves the German politik, CEOs, and public at a critical decision point in terms of extending the socialist empire experiment (at their expense) or going it alone facing pain now for a brighter future - the Linde CEO seems convinced (and Schaeuble seems less than inspired by the euro-bond-based fiscal compact solution).

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Sun, 01/15/2012 - 16:41 | 2066847 Eireann go Brach
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Germany needs Obama to pay them a visit ASAP and deliver a hope and change speech!

Sun, 01/15/2012 - 17:06 | 2066929 maxcody
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Greece is what the U.S. will become if Obama and the dumocrats win nov 2012.

Sun, 01/15/2012 - 18:01 | 2067038 Kayman
Kayman's picture

Greece is what the U.S. will become no matter which one of Wall Streets puppets win nov 2012.

There, fixed it for ya.

Sun, 01/15/2012 - 18:25 | 2067071 cossack55
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Solid fix.

Sun, 01/15/2012 - 22:55 | 2067734 trav7777
trav7777's picture

why the hell did they let a shit nation like Greece into their currency union in the first place??

There is a qualitative difference between the wops and the krauts.  They know it and have known it for a long time, no matter how hard the MSM tries to suppress it.  All ethnic groups are not equal.

Sun, 01/15/2012 - 23:22 | 2067799 seventree
seventree's picture

Nobody complained when the EU economy was riding high and Greek big spenders soaked up the output of export nations like Germany. Easy money while it lasted.

Sun, 01/15/2012 - 23:40 | 2067832 morning_glory
morning_glory's picture

Goldman Sachs helped them fix their books to meet EU entry criteria.

 

http://www.spiegel.de/international/europe/0,1518,676634,00.html

Mon, 01/16/2012 - 00:06 | 2067876 economics1996
economics1996's picture

"All ethnic groups are not equal."

 

How long did it take you to figure that one out?

Mon, 01/16/2012 - 06:30 | 2068208 Oliver Jones
Oliver Jones's picture

Some people still haven't figured it out. If you have figured it out - and are foolish enough to say so - that makes you a racist, apparently.

Mon, 01/16/2012 - 07:02 | 2068220 Instant Wealth
Instant Wealth's picture

For geostrategical reasons:

Greece = Southeastern flank of NATO

Mon, 01/16/2012 - 23:38 | 2070091 Tompooz
Tompooz's picture

"All ethnic groups are not equal."

Greek Untermenschen, eh, Trav?

You are talking about the ethnic group right at the foundation of your civilization.

Ethnic groups do adopt new cultures, you know.

Sun, 01/15/2012 - 20:40 | 2067373 Jack Burton
Jack Burton's picture

Really? What about the Republican candidate Romney? Will he not reverse the Obama socialist agenda and return America to free enterprise, low taxes, prosperity and world domination?

Romney is Republican, they can and will save America. Everything will change the day Romeny is sworn in. He is no puppet of "the street" nor will he cave in to all those willfully unemployed bums who refuse to get a job. He will stop the greedy old people form taking all that social security money and instead turn that money to good account in increased military spending.

America is headed for brighter days under the great republican president "Romney".

Sun, 01/15/2012 - 21:01 | 2067442 LooseLee
LooseLee's picture

Romney is 'Obama-Lite'.....Ron Paul is our ONLY hope. Huntsman would be better than Romney...

Sun, 01/15/2012 - 22:03 | 2067609 pods
pods's picture

No, our only hope is that enough of the populace become familiar with the reasons why Ron Paul is so popular amongst learned people.

Until I hear the phrase "fractional reserve banking" on a daily basis in real life we are still doomed.

pods

Sun, 01/15/2012 - 23:18 | 2067790 YBNguy
YBNguy's picture

If I ever hear rehypothecation on a daily basis Ill nut myself.

Mon, 01/16/2012 - 00:01 | 2067866 StychoKiller
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Mr. Huntsman is now looking for a different gig...

Sun, 01/15/2012 - 22:01 | 2067603 pods
pods's picture

An a new horse is breaking out of the pack and is moving up on MDB fast....................

 

Sun, 01/15/2012 - 23:33 | 2067821 Milestones
Milestones's picture

Good tongue in cheek--dear Gawd thats what I hope it is!!!          Milestones

Mon, 01/16/2012 - 00:00 | 2067864 StychoKiller
StychoKiller's picture

Bwahahahaha...you're joking, right?

The Republicons and Decepticrats are two sides of the same coin, the Leviathan Party.

Mon, 01/16/2012 - 00:08 | 2067880 economics1996
economics1996's picture

Jack your kidding, right?

Mon, 01/16/2012 - 03:29 | 2068113 Ms. Erable
Ms. Erable's picture

I laughed so hard reading that I nearly crapped my pants. Romney = AFP (Another Fucking Puppet); parts are interchangeable with the Obamatronic '08 model.

Sun, 01/15/2012 - 20:51 | 2067419 aquagreen73s
aquagreen73s's picture

I think what you meant to say was: "Greece is what the U.S. will become no matter which one of the Wall Street puppet parties wins in nov 2012 unless it's Ron Paul in office."

Sun, 01/15/2012 - 18:21 | 2067068 StockProdigy
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Obama wins we become Greece sooner. Romney wins it will be delayed a year or two.

Sun, 01/15/2012 - 18:44 | 2067100 surf0766
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We are already Greece and worse.

Mon, 01/16/2012 - 00:11 | 2067884 economics1996
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We have lots of bombs.

Sun, 01/15/2012 - 20:31 | 2067342 Central Bankster
Central Bankster's picture

Mittbush Romnobama is a change of pace?

Mon, 01/16/2012 - 06:20 | 2068203 Whatsoever
Whatsoever's picture

The US, UK, Japan are in much worse state than Europe will ever be.

And this won't change for a long time, no matter what obstacles the american or british financial industry tries to implement for us.

 

Note, that e.g. Italy is in far far far better state than what is reflected by american and british crowds and media.

Reading knowledge helps, sometimes at least.

Greetings from Vienna.

 

Sun, 01/15/2012 - 17:11 | 2066939 mattu13048
mattu13048's picture

Who cares about these morons. Let's trade, man. Enjoy this shit: http://t.co/Itk2Q1v8

Sun, 01/15/2012 - 20:25 | 2067324 Stoploss
Stoploss's picture

The Euro is dying an ugly and painful death.. WHO KNEW!!??   LOL!!

Sun, 01/15/2012 - 17:26 | 2066958 Zero Govt
Zero Govt's picture

He did deliver "Hope & Change" pre-election in Berlin

He didn't deliver "Hope & Change" post-election..

..it was more like "More the Same.... only Worse"

Ho hum, that's politicians for ya

Mon, 01/16/2012 - 03:47 | 2068124 PY-129-20
PY-129-20's picture

I remember that one. He was very popular over here. He had no achieved anything. Did that matter? But as a Berliner I know what they were hoping for back then. Another Kennedy.

I think Obama could've won the election over here too. Not that Merkel would be the better candidate. That's the dilemma. We Germans don't have a good candidate. At least you have Ron Paul and a choice. Me? Nothing. Just the same crap over again.

I will probably vote for the Pirates. But even in that case I'll gain no hopium in exchange. What a country! Ha! I guess Robotrader would love it. All these record numbers in the MSM now - and they matter nothing and will matter nothing and it will dawn upon the ignoro.

Mon, 01/16/2012 - 07:09 | 2068228 Instant Wealth
Instant Wealth's picture

Warning PY !

Pirates party plans to forbid trading of derivatives

... and, of course, Greetings to Berlin from a former FU student

Sun, 01/15/2012 - 17:44 | 2067008 americanspirit
americanspirit's picture

Followed by Timmy to kick ass and get those Krauts in line

Sun, 01/15/2012 - 18:26 | 2067073 cossack55
cossack55's picture

Not too tough when you are holdin' all of the Krauts gold.

Sun, 01/15/2012 - 22:31 | 2067693 non_anon
non_anon's picture

yeah, whatever Obama touches turns to shit

Sun, 01/15/2012 - 16:38 | 2066848 Eireann go Brach
Eireann go Brach's picture

Fucking Double post.. Or just lend Merkel his TelePrompTer!

Sun, 01/15/2012 - 16:51 | 2066893 Ghordius
Ghordius's picture

Dear ol Wolfgang Reitzle is not exactly the most representative source, he made aquisitions in the UK and is cherishing his contacts with the Guardian. The way he posed it is also telling...
But hey, it's The Guardian, it has to cater to it's reader's tastes and prejudices - one of them is that the diabolical EUR has to die...

Sun, 01/15/2012 - 17:05 | 2066909 The Big Ching-aso
The Big Ching-aso's picture

 

 

Newsflash:   The still magnificently productive Germanic people aren't gonna let any more FUBAR foreigners play 'Let's Bury Our Carbunkled Schnitzelgrubens Up Their Heinies' without a hefty reciprocal price.    Who in phuck can blame them?  That gig's kaput.

Sun, 01/15/2012 - 17:23 | 2066966 Zero Govt
Zero Govt's picture

Ghordius, have you ever met/read the Guardian newspaper???

a bigger bunch of Pro-EU progressives/Marxists you could never meet

Sun, 01/15/2012 - 17:41 | 2066998 Ghordius
Ghordius's picture

The British version, yes, sometimes, the American version, never.
"Pro-EU progressives/Marxists"? A bit more moderate than this I'd say. The convictions I am writing of are National, though. As I find out whenever I am on dear old Blighty...

Sun, 01/15/2012 - 16:41 | 2066863 847328_3527
847328_3527's picture

great metaphor for the global economy:

 

http://media.tcm.ie/media/images/c/CostaConcordiaSinking2_large.jpg

 

 

Sun, 01/15/2012 - 16:49 | 2066883 navy62802
navy62802's picture

That's the collateral backing Italian bonds. Haha.

Sun, 01/15/2012 - 17:54 | 2067029 Tyranny is Love
Tyranny is Love's picture

What the price tag on the Ship?

 

And which company owns it?

 

An asset that big will be on someones books, and with hyper-rehypothecation in the City of London its likely to be an asset backing a lot of paper.

Please correct me if I'm wrong and the shipping industry operates differently, As this is new to me. Thank you of MF Global.

Sun, 01/15/2012 - 18:28 | 2067075 Reese Bobby
Reese Bobby's picture

Q. Why does the new Italian Navy use glass bottomed boats?
A. So they can steer clear of the old Italian Navy.

Sun, 01/15/2012 - 20:27 | 2067335 Al Gorerhythm
Al Gorerhythm's picture

Germany being the rock; Satellite nations the ship of fools?

Mon, 01/16/2012 - 23:43 | 2070094 Tompooz
Tompooz's picture

"Shipwrecked off the Island of Ponzi"

Sun, 01/15/2012 - 16:44 | 2066866 Ag1761
Ag1761's picture

You will succombe to German discipline, now where/when have we heard that before.

Sun, 01/15/2012 - 16:46 | 2066872 Dick Darlington
Dick Darlington's picture

Meanwhile in Hungary the EUSSR flag gets it.

http://storyful.com/stories/1000018731

Sun, 01/15/2012 - 16:56 | 2066905 Ghordius
Ghordius's picture

LOL - and what kind of reaction is this supposed to cause?
It's not one of the holy ones...

Sun, 01/15/2012 - 17:37 | 2066993 Zero Govt
Zero Govt's picture

they're shouting "Burn it, burn it, burn it" ...awesome

the EU flag should be Commie red with a fascist Nazi symbol in the corner to be accurate ..Brussels is a toilet of humanity, can't wai for the shithole to collapse

..and I'm down in Budapest tomorrow, hope to burn one myself if the protest is still going

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