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German Coalition Member Urges Suing ECB Over Draghi Open-Ended Promise

Tyler Durden's picture





 

Anyone hoping that the bitter animosity between Mario Draghi and Germany will be any less hostile this morning, following last week's guarantee by Draghi that all shall be well and the ECB will do "anything" to preserve the EUR, only to be followed by Germany's Schauble essentially saying this is certainly not the case, today we get a clarificationary follow up by Joerg-Uwe Hahn, a member of Merkel's junior coalition partner, FDP, who said that the German government should consider the "unusual step" of taking legal action against the European Central Bank over bond purchases. While Hahn's comments are for now seen fringe, the fact that Die Welt has openly broached the topic to an increasingly angrier population (and Spain's remarks that Germany itself has to be grateful for being bailed out after WWII will not help) will likely only strengthen the resolve of Germany to not relent to provocations by either Monti, as of the June 29 summit, but to demands from both Draghi and Juncker to accept that the ECB's printing utopia is in fact reality.

From Reuters:

"The European treaties allow member states to sue the ECB," Hahn, a member of the ruling centre-right coalition in the state of Hesse, told Monday's edition of Die Welt newspaper, adding that Berlin should consider opening a lawsuit against the bank via the European Court of Justice.

 

"It's time to open the toolbox of the (EU's) Lisbon Treaty and see how one can ensure that the ECB is brought into line to focus on its original task: monetary stability," he said, acknowledging that this would be "an unusual step".

 

Hahn's comments were in response to a pledge last week by ECB President Mario Draghi that the ECB was ready to fight to save the euro. "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro," Draghi said.

 

Asked about Hahn's suggestion, a senior member of Merkel's Christian Democrats, Norbert Barthle, responded cautiously, telling Die Welt: "If Mario Draghi says the measures are legally covered by the mandate, then I believe him for now."

Naturally, as we showed earlier, "believing" the ECB's head traditionally leads to substantial losses, as Germany will soon find out. Most likely sooner rather than later, if there are more articles like this one appearing in the Frankfurter Allgemeine titled "Bailouts without End."

 


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Mon, 07/30/2012 - 09:11 | Link to Comment Neethgie
Neethgie's picture

the germans have tryed to be the kind reformed characters of europe, if the rest of europe keeps pushing them, within the next few years it will be blitzkreig and death camps all over again

Mon, 07/30/2012 - 09:29 | Link to Comment WhiteNight123129
WhiteNight123129's picture

As a European (French) I hope with all my heart that Germany succeeds in bankrupting the government of the periphy and that the flow of money to the governments is cut for good, if Germany manages to shrink the Spanish, French, Italian government size, that will be wonderfull, Go Germany, no printing no profilgate states. The smaller the State the more freedom, cut the blood flow to those vampires and watch them evaporate in the sunlight. The people will suffer but if the end outcome is to have Western Government to shrink, alleluia. This time around Germany is on the good side of the fight, all europeans know that, and a lot are cheering that their own governments are forced to be on a diet. Europe is trying to shrink its government spending first, the countries which are shrinking the most their government will fare teh best first.

 

Mon, 07/30/2012 - 10:42 | Link to Comment FL_Conservative
FL_Conservative's picture

Trust me: Americans are cheering on the Germans too, hoping that, maybe, their course will finally wake up our political class.  Wishful thinking I'm sure.

Mon, 07/30/2012 - 12:16 | Link to Comment manapisca
manapisca's picture

Dear WhiteNight123129, the next in line will be France with its huge government and reverence towards statism. Can't wait to see the PIIGS turn into PFIIGS. You really are like the pot who is calling the kettle black! ROFL...

Mon, 07/30/2012 - 10:37 | Link to Comment schatzi
schatzi's picture

What the fuck are you on about? Because Germany resists socialisation of European debt and the end of the balanced budget, you forsee death camps? GTFO.

Mon, 07/30/2012 - 09:15 | Link to Comment Manthong
Manthong's picture

In another day and time Draghi's worries would not be about lawsuits, it would be about Stuka's.

Mon, 07/30/2012 - 09:20 | Link to Comment battle axe
battle axe's picture

Is Germany finally growing a sack?

Mon, 07/30/2012 - 09:40 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Yes...but it only has room for one ball...

Mon, 07/30/2012 - 10:40 | Link to Comment TPTB_r_TBTF
TPTB_r_TBTF's picture

The Germans donT take the FDP seriously; therefore, i donT think we should either...

 

The FDP = losers

Mon, 07/30/2012 - 10:23 | Link to Comment saturn
saturn's picture

Nah, just enlarged pussy lips..

Mon, 07/30/2012 - 09:28 | Link to Comment Gongipede
Gongipede's picture

Instead of giving so much emphasis on the declaration of this very prominent member of the ruling centre-right coalition in the state of Hesse, Mr Hanh, why you didn't update your readers about the outcome of the Italian auctions?

Mon, 07/30/2012 - 09:30 | Link to Comment Miss Expectations
Miss Expectations's picture

If Obama said:

"Well, first on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehmans and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless…."

well, then I believe him for now, too.  (SARC)

Mon, 07/30/2012 - 09:36 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Germany will leave the Euro.

Clearer and clearer by the day.

Mon, 07/30/2012 - 10:43 | Link to Comment miker
miker's picture

Good insight. I think after the ECB eases, and Germany challenges, one strong possibility is they will threaten to leave and/or leave. Actually a Euro without Germany would actually make more sense/be more balanced; of course notwithstanding all the debt.

Mon, 07/30/2012 - 12:18 | Link to Comment schatzi
schatzi's picture

Us smaller nations would not want to stay in a currecny without Germany. Austrians, Fins, Luxembourgers and Dutch would much rather tie our currency destiny to Germany than to Greece, Spain or Italy. If Germany goes, so will most probably all the other minor core nations. A Euro-schism.

Mon, 07/30/2012 - 20:56 | Link to Comment StychoKiller
StychoKiller's picture

Hmm, is Merkel gonna nail her Theses on the doors of the ECB?

Mon, 07/30/2012 - 09:38 | Link to Comment Let The Wurlitz...
Let The Wurlitzer Play's picture

The solution to this is simple.  Germans should just start printing marks again and float details on the excahange process.  That will shut Draghi up real fast.

 

Mon, 07/30/2012 - 09:42 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

For some, the Euro is a necessity.

For others, it is a convenience.

Which camp do you think Germany falls into?

Mon, 07/30/2012 - 09:50 | Link to Comment Hobbleknee
Hobbleknee's picture

This is all a show, so the politicians can feign trying to do something.  They know it's already too late to save anything.  The planned implosion will continue as planned.

Mon, 07/30/2012 - 09:59 | Link to Comment yogibear
yogibear's picture

The US fed and ECB can push to have those in Germany retire at 100. They can use the money to bail out and sustain the rest of the Euro members. The Germans are obedient. Hitler proved that. 

Mon, 07/30/2012 - 10:10 | Link to Comment Byte Me
Byte Me's picture

Right. Now that the tame insignificant junior coalition partners have fulfilled their obligation of pooping on Draghi's parade, do we get the tacit "wind-a-kraut" support for Draghi from France/Italy/Spain this afternoon -- or is that tomorrow?

Mon, 07/30/2012 - 10:13 | Link to Comment Snakeeyes
Snakeeyes's picture

The EU made this mess with massive spending, entitlements, and debt. Now they have such staggering debt that all the ECB do is relay the inevitable and pray for an economic turnaround.

http://confoundedinterest.wordpress.com/2012/07/30/sovereign-debt-rollover-can-the-ecb-and-fed-resolve-the-debt-crisis/

Mon, 07/30/2012 - 10:18 | Link to Comment Sudden Debt
Sudden Debt's picture

DESTROY THE MAASTRICHT TREATY AND LET THE GATES OF CHEAP MONEY FLOOD THE LAND!!!

 -- Draghi --

Mon, 07/30/2012 - 10:21 | Link to Comment dvsteenk
dvsteenk's picture

Draghi said he will do anything he can do

doesn't imply he will do anything if he can't

may imply that he just said it to allow his banker friends behind the curtain pocket billions in just 2-3 days

if the germans say he can't do, they will be blamed for the ensuing collapse

Draghi wins both ways

Mon, 07/30/2012 - 10:39 | Link to Comment miker
miker's picture

If Draghi eases first, even if the Germans challenge it, the legal morass will take forever.  That is the plan; go ahead without permission.

If the ECB doesn't print, the Euro economy will freeze up and collapse.  It's as simple as that.  Any faith in the Euro will vanish and people will exit the currency.  Now, if you were a government official and/or political leader; how would you like to deal with THAT??  Not.

People can argue about right/wrong till the cows come home.  And I agree with the "wrongness" of all of this.  But at the end of the day, they will do what they have to to avoid collapse and possible anarchy.  Plain and simple.

Expect easing this Thurday or sooner in Europe.  Strong possibility of coordinated easing with US Fed at same time this week.  Will be MBS securities.

Mon, 07/30/2012 - 11:56 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

No.

It would be pretty easy for Germany to construe this as theft of German money.  That is a criminal matter, not civil.

Draghi could then be arrested if he sets foot in German territory.  In fact, Germany could arrest him on any EU territory and fly him to Germany.

This is not a civil matter for lawsuits.  It's criminal if he acts outside the treaty (para 1.23).


Mon, 07/30/2012 - 20:59 | Link to Comment StychoKiller
StychoKiller's picture

Easier to beg forgiveness than get permission...does Draghi have the 'nads?

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