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Markel Majority Fades As Internal Revolt May Signal 'Referendum'

Tyler Durden's picture




 

Despite assurances that "we always get the majority we need" by Frau Merkel, the FT reports that the Bundestag's vote this Thursday (expected to come down in favor of the bailout) will not gain the so-called 'Chancellor's majority'. While she retains an overall majority of 19 (from the ranks of her own Christian Democratic Union, its Bavarian sister party, the Christian Social Union, and the liberal Free Democratic party in her coalition), the recent ESM vote saw 26 of her  supporters rebel (voting 'Nein' or abstaining) - though ended up being passed thanks to support from SPD and The Greens. While a 'Chancellor's majority' is not required to approve the EUR100 billion Spanish bailout, "Anything other than a chancellor’s majority is a defeat, and a sign of the erosion of the power of the chancellor," which leads us down the path we have noted previously of the inevitability of a referendum-like vote next year (which may just be the leave-the-Euro-coz-that's-what-the-people-want 'out' Germany has been looking for). Certainly, the vote is no panacea (politically or economically) as Jens Weidmann notes that the bailout would be more effective 'conditions' were applied across Spain, adding that "It would have a positive effect on the bond market if investors saw that the conditions... went beyond the banking sector".

 

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Sun, 07/15/2012 - 14:33 | 2617917 zilverreiger
zilverreiger's picture

"Markel" in the title is a play of words?

Sun, 07/15/2012 - 14:43 | 2617941 knukles
knukles's picture

It's a technical reference to the banks Markeling EuroTrash to Market.

Sun, 07/15/2012 - 14:33 | 2617919 timbo_em
timbo_em's picture

FT mises the main point: Mr Seehofer leader of Merkel's sister party crushed the latest summit communique saying that he and his party won't support direct recapitalisations of banks, thus leaving the sovereign off the hook, whether there is an eurowide banking supervision or not.

Sun, 07/15/2012 - 14:34 | 2617921 apberusdisvet
apberusdisvet's picture

The kicked can must be the size of a pop top by now.

Sun, 07/15/2012 - 14:53 | 2617963 CrazyCooter
CrazyCooter's picture

Ah, "deutsche mark" ... "deutsche markel" ... "deutsche merkel" ... I get it! Good catch!

Regards,

Cooter

EDIT: Thought I was replying up thread ... guess not!

Sun, 07/15/2012 - 14:57 | 2617985 CrashisOptimistic
CrashisOptimistic's picture

Item 1: If Merkel loses power, the opposition is MORE disposed to bailout than she and her coalition.  Her losing elections is not a conservaitve development.

Item 2: People rebelling against the bailout can be replaced by the more left wing parliament seat holders.  Some of her coalition can abandon her, save their own seats with the electorate, and the bailout still passes Parliament.

Item 3: They Will Do Anything To Keep The Wheels Turning.  Nothing that is within their control will be allowed to stop it.  Only oil is outside their control.

 

Sun, 07/15/2012 - 15:53 | 2618162 A Man without Q...
A Man without Qualities's picture

There is a faction in Germany which seems to have grown more powerful since the recent crisis in the Spanish banks.  It is not allied with any political party, except maybe the FDP but not officially.  This group has decided the Euro project is doomed and they want to destroy it before it goes any further (as they see the alternative as ultimately the destruction of Germany).  The first line of defence will be the constitutional court.. the second a referendum...

Sun, 07/15/2012 - 18:50 | 2618695 francis_sawyer
francis_sawyer's picture

nice observation... but not enuf thrust to attain orbit...

Sun, 07/15/2012 - 21:40 | 2619040 Mr. Poon
Mr. Poon's picture

Exactly.  Every party other than Merkel's is going to double down on the unification project and on progressivism in general.  They see the problem, not as too much government and too much spending, but as not enough of either.  Just look at the direction France has gone since the last election for a hint of where Germany could go.  If Merkel's party loses power, by the next morning there will be proposals to double social spending in Germany and bail out the rest of Europe while raising taxes to a level that would make the Swedes blush.

The simple problem is that there is no real opposition, no real alternative in Europe; even the so-called conservatives are just lightweight progressives.  Not until the entire progressive experiment fails spectacularly will there be real alternatives, and given Europe's track record, they could be very ugly alternatives indeed.

Sun, 07/15/2012 - 15:20 | 2618065 disabledvet
disabledvet's picture

Look's like the periphery will be forced to pull out of the "German Union"--perhaps it will be called "temporary" but strikes me as HIGHLY permanent. What happens with France will determine whether this a "crash landing" or "a crash" in my view. It appears all the stops have been pulled out (figuratively and literally) to keep a Franco/German Union in at least a debt sense "plausible." If more basic industry follows Airbus to the USA however and i think a true breaking point will be the result. This is grounds for war i might add and France has, next to England, been the USA's closest "battle buddy" since 9/11 and the War on Terror. On the other hand Germany has a draft and has been the anchor tenant of NATO since it's inception back in 1949. I'll be watching to see what happens in Syria for clues...http://www.youtube.com/watch?v=HhHwnrlZRus

Sun, 07/15/2012 - 15:22 | 2618073 pain_and_soros
pain_and_soros's picture

Die Deutsch Mark(el)...mmm

Sun, 07/15/2012 - 15:39 | 2618121 Never One Roach
Never One Roach's picture

"Referendum" is a four letter word to politicans.

Sun, 07/15/2012 - 16:53 | 2618337 Wolferl
Wolferl's picture

There was no "chancellor’s majority" (majority of the members of parliament by the ruling coalition) at the ESM vote and this caused no problem. And there will be no problem on Thursday. Merkel is stronger than ever, she doesn´t even depend on some stupid regional party leaders in her coalition.

Sun, 07/15/2012 - 17:12 | 2618390 Caviar Emptor
Caviar Emptor's picture

There are many reasons why Germany wants the bailouts. Germany's own economy and banks are exposed. The cushion is flat

Sun, 07/15/2012 - 17:21 | 2618409 jonjon831983
jonjon831983's picture

It would be a good way out... she wouldn't be the one who gets Germany out or causes some other country to leave the EUR and/or the EZ.  It was the "will of the people" and "it was out of my hands" "The people have spoken".

Sun, 07/15/2012 - 22:37 | 2619159 pain_and_soros
pain_and_soros's picture

In some respects, a referendum in Germany would not just provide cover for Merkel & German politicians, but it would also be a direct message sent to the PIGS politicians & populations - you are responsible for your own mess - don't expect any handouts from Germany, (at least without putting up some real collateral aka your gold)...

There may also be an implicit message that Germany may be prepared to leave the euro if the PIGS can't get their act together.

 

Sun, 07/15/2012 - 22:53 | 2619210 New_Meat
New_Meat's picture

Ziss "Markel" iz unfamiliar to uz.  Vho iz dis "Markel".  Ve haf toutg zat zis "Merkel" vas in zee poket.

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