Merkel Economic Advisor Does Not Exclude Eurozone Break Up

Tyler Durden's picture

In an interview making the rounds this morning, which appeared in German "for the people" daily Bild, one of the German Council of Economic Experts, Beatrice Weder di Mauro, who is one of five economic advisors to Angela Merkel, put it in no uncertain terms (Bild readers don't like the kind of "political talk" other politicians are best known for) that while a breakup of the Eurozone in 2012 would be "bad for everyone involved" it can not be completely excluded. She also warned that unless the financial crisis is intercepted quickly, it can lead to a recession in Germany, with the economy contracting 0.5%, and leading to an increase in unemployment. Finally, she made it all too clear how Germany plans to deal with the PIIGS laggards: "Over-indebted euro-zone nations must submit to a long-term insolvency rule." Now granted this was google translated, but somehow we believe it captures the essence of the underlying thought quite succinctly. In other words, Germany is once again toying with the "expulsion" nuclear option, the same one that according to UBS analysts as recently as a few weeks back, would make precious metals, tinned goods and small caliber weapons the best investment option. How this will impact the EURUSD on this day when the currency is already at a near 2011 low is unclear, but will hardly be favorable.

Full google translated interview.

Who is to blame for the crisis €?

Beatrice Weder di Mauro: "Some countries have taken part and individuals over the years too much debt. The banking crisis has also driven the national debt jumped into the air. Now the fear is great that they can not repay the debt. "

Why was there no warnings?

Weder di Mauro: "Because the consequences of debt and making the real estate and banking crisis have been underestimated."

Will the € break up in 2012?

Weder di Mauro: "That would be bad for everyone involved - but not completely excluded. The policy has been trying for almost two years to contain the crisis and to draw fire walls. However, these walls are not rich yet. "

Why not? What's wrong?

Weder di Mauro, "The politics, the crisis initially underestimated and too little done. Now they sometimes can not act as fast as they want. This is a problem, because the markets are nervous and impatient. "

What do you suggest?

Neither Mauro: "We need a triad: Over-indebted euro-zone nations must submit to a long-term insolvency rule. The others must undertake to reduce debt and stabilize the government budgets. With a debt settlement pact may fall in the debt ratios below 60 percent throughout 20 years. This requires that the short-term interest rates are pushed through mutual guarantees to a realistic level. "

How much will the crisis cost the taxpayer?

Weder di Mauro:
"If we succeed with a debt settlement pact to stick together to
stabilize the euro and durable, no significant losses are expected.
Failing that, consequences and costs are incalculable. "

Can choke off our economic crisis, the euro, destroy jobs?

Neither Mauro: "Not if we get the crisis under control quickly now. Then the German economy in 2012 is expected to grow by around 0.4 percent. But the crisis should lead to zero growth in world trade, a contraction of the economy by 0.5 percent is possible. Then, jobs were in jeopardy. "

Is there threat of an inflation monster?

Weder di Mauro, "No. The general economic slowdown provides short-term rather stable prices. "

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Popo's picture


"If we succeed with a debt settlement pact to stick together to stabilize the euro and durable, no significant losses are expected. Failing that, consequences and costs are incalculable. ... 

If we get the crisis under control quickly now, then the German economy in 2012 is expected to grow by around 0.4 percent. "


And if a population of martians who look just like Dallas cheerleaders, lands outside my door and makes me their supreme emperor -- things could also work out.

Global Hunter's picture

The Emporer has no clothes!

Sandmann's picture

he spent his money on a dictionary

AnAnonymous's picture

things could also work out.


But things will work out.

All what matters is to be aware of what things.

Clearly, European US citizens are after the project "Blobbing up Europe"

This crisis has confirmed this region of the world on that path and Germans would be stupid to let this opportunity ruin.

As US citizens advocate bigger than biggest is still not enough, they even managed to get much more than blobbing up.

Germans have managed to impose administrative sanctions.

Something kept under the rug but that is bigger than biggest when one considers all US citizenism mantra.

Ah, US citizens have told much about the necessity of a proper court hearing, ah, they have invaded, destroyed many societies because supposedly, those societies did not offer a proper court hearing.

Here, theGermans, backed by the rest of European US citizens, have managed all in silence to impose administrative sanctions. No proper court hearing.

The Germans would be dumb not to keep the fearmongering up as they have obtained so much from it already.

Pretorian's picture

1 of those PhD's ...  who doesn't know difference between name ans surname. No wonder this crisis is continuing for ever.

Jolly.Roger's picture

what da fuk is wid the gold price?

misterc's picture

Price stabiliteeeeeee.
Hard at work managing inflation expectations.
It's the European remix of the song called "strong Dollar policy" by Tim Geithner.

non_anon's picture

wait wat, Merkel still in power?

BadKiTTy's picture

Of course another way of solving the overindebtedness would be for the banks (many German ones!) to eat the losses made to those who will never be able to pay them back. 





Sandmann's picture

Ah but you have forgotten RE-HYPOTHECATION and maybe those US Pension Funds don't want German Banks to impose a haircut on their Bond Funds !

ThrivingAdmistCollapse's picture

They could do that and go bankrupt.  Of course if all the major Euro banks went Belly Up, all major banks world wide would crash, thus causing a global economic collapse  :(

bbelux's picture

Are they any German here to explain why the world should stop quoting das Bild here?


At least one should follow this link :


If too lazy here is the concept :


Pair of boobies

TV program


Road pursuits with cops

Information, if possible with break up, explosions, supermens, superheros, superzeros, super something

More Boobies

Boobies again

Ass of the year contest

Boobies to come in the next edition

Wolferl's picture

Hey, it´s Tyler´s website. If he feels like quoting a stupid German tabloit, it´s up him. ;-)

TheGardener's picture

Bild is great. A true yellow press / tabloid as they come.

They have to appeal to the common man in the street and
cannot fully ignore apparent mood changes among the public.

Working for a daily like they are , you have to listen to the people if you want to sell . Of course you can sell your dumb readers all kinds of shit and more than a mouthful of .gov propaganda. But you have to stay tuned to the "primitive instincts" of the populace.

It`s the feedback loop you`ll be watching for , not in
between the lines as in good old Prawda days.

Spooky Polish's picture

We got plenty of nice boobies here in Poland ! C'mon !

francis_sawyer's picture

I think we need more boobies...

Fips_OnTheSpot's picture

Just as dailymail/thesun/.... cnbc... :-D

After all that certain "newspaper" did the interview.

I got the Bull by The Horns - HELP's picture

The point is the problems are being discussed in a mainstream tabloid.

This means the common folk are becoming aware of the problems.

Hitler used mainstream press to "educate" the masses.

I think the Euro is toast, and Germans are being prepared. You don't want angry voters do you?

Ghordius's picture

spot on - now just include Wall Street where most have no clue how little Greece is

Greece leaving the EZ will give lots of people the willies

Contagion is just another word for "WTF! I have no clue what is happening!"

"the Euro is toast" is just one of those clueless statements...

Sandmann's picture

BILD Zeitung is the largest circulation newspaper in Europe - it is very close to Frau Merkel and for that reason alone Tyler is right to quote it.


You might object to Boobies, but for heterosexual readers they make the unpalatable truths of Europolitics more digestible

A Man without Qualities's picture

Something I have begun to understand about the German national pysche is they have an inability to admit they have made mistakes.  Now, with  clear evidence that most of Europe is suffering from a solvency crisis as a result of excessive government spending and a real estate boom that hid the weaknesses of peripheral countries' economies, German "experts" are arrogantly pointing out the failure of others but ignoring the idiotic lending policies of their own banks.  

A good example of this is German lenders and borrowers were reluctant to create a domestic property boom (demanding higher deposits, initial purchase costs of 11% versus long term controlled rents are major factors why 60% are happier to rent), but the same banks were perfectly happy to lend to other nations' banks to support theirs.  So, we now have a situation were similar properties on the Polish side of the eastern border are TWICE the price as those on the German side.  However, the Germans continue to assume that a bad debt is solely the fault of the borrower.

We cannot have a viable solution until the largest creditor and largest economy admits it made mistakes and that debt levels are too high to cope with belt-tightening while making creditors whole in a deflationary economy.  But like I said, Germans don't like to admit to making mistakes.

Wolferl's picture

Funny comment, since most of of the PIIGS public and privat debt is held by French, Swiss and British banks. But it´s okay, just stick to your "the Germans are to blame for everything" meme.

Sandmann's picture

You will find the German public is CONVINCED their political and banker class has made enormous mistakes over 30 years. The Landesbanken are controlled by POLITICIANS who sit on their boards which might explain why most like WestLB and NordLB and BayernLB are bust. Germany has a commercial property boom - maybe you haven't seen Berlin or Stuttgart21 or any of the major public works schemes funded by taxpayers. German Employees have had NO REAL INCREASE in income for 10-15 years so they are hardly likely to rush out and buy houses. The demographics are made worse by the divorce rate.

Rents are NOT controlled long-term but only on a rolling-3-year horizon which excludes Heating and Water Costs and the enormous cost of Refuse Disposal.

German Voters are not wallowing in cash, they are finding it hard to pay their way with rising taxes and prices.....only the TOP 5% have seen any real income increases since 1999. Without Aldi and Plus and Lidl Germans would be going hungry. You seem to have such a glib understanding of 80,000,000 people who currently feel screwed over by a ruling elite as remote as the East German Politburo under Erich Honecker.


Deutsche Bank ceased being a German Bank and wanted to play on Wall Street so it bought Morgan Grenfell and a host of I-Banks so it could cra@p on German Savers and play with Goldman Sachs and Morgan Stanley in the Washington Consensus game of Russian Roulette or Kool-Aid Banking



Ghordius's picture

"Deutsche Bank ceased being a German Bank" +1000

the same applies to Credit Suisse and UBS, they ceased to be Swiss Banks, they are now part of the MegaBanks

Rynak's picture


German Employees have had NO REAL INCREASE in income for 10-15 years so they are hardly likely to rush out and buy houses.

You're being optimistic. Taking into account how the euro was introduced, and subsequent massprinting by the fed in recent years, what actually happened is that in a timespan of about 12 years, the REAL income (as in purchasing power) has declined by 66% or more. The german population has in just 15 years gone from rich and fat, to a 2nd world population.

No other population in europe has in relative terms lost as much via the euro, as germans. While it may have been good for banks and multinational megacorps (exporters), germans have been the biggest losers in the EMU.

If anyone 15 years ago proposed something like this to me, i'd have laughed and said "Yeah right, and this will not result in civil war at all."

Ghordius's picture

hahaha - so the Germans not inducing their "middle class" to buy into a property frenzy with ultra-cheap money is also a German mistake?

how does an American feel when he hears that 60% of the Germans live quite happily in one of the best rental systems of the world?

Cheated? Or just amazed and believing they must be mad?

boiltherich's picture

Yes, and also the comment about property being double on the eastern side of the border in Poland what it is in Germany, Poland is not in the EMU, they still use the zloty, by the way, zloty is literally translated as golden. 

TheGardener's picture

Been to Stettin, well , not really Poland but under good Polish supervision and full of nice white people. The real estate agents advertised apartments for 200K Euro in apartment blocks that would only fetch 200K for a PACK-OF-THREE ENTIRE BLOCKS from a gullible investor on the East German side of the border only to be ripped off on regulatory demands thereafter that will cost him his shirt.

Clam McCain's picture

lets get to the endgame

Market Efficiency Romantic's picture

Every government since Kohl has in very critical situations used Bild - the most widerspread newspaper (>4mln copies a day) in Germany) - as platform to communicate to the masses that do not read the likes of the post or the times or watch political talks on tv. It has since Kohl been a media outlet to communicate critical standpoints without getting involved in political infights.

BTW Weder di Mauro is smart, but what enables her really as economic advisory board head is that she like straight talk. I attended a presentation by her in November, where she brought up the redemption fund idea and the reestablishment of the disciplinary function of 60% debt to GDP with expulsion consequences. Back then, she also claimed (opposite to what Merkel said) that the ECB needed to do more in the medium term to allow reestablishment of new governance frameworks for the Eurozone.

The problem with her idea (or what she might have really intended): the %/GDP debt limit has two variables and in a deleveraging cycle, the GDP variable will suffer, so if you don't manage to reduce debt in recession by 5-10% (which is illusionary), anyone would get kicked out of the Eurozone.

I am Jobe's picture

Quick someone wake up Krugman please and tell him to hang himself but first shred hid fucking PhD

Dick Darlington's picture

Spain Retail Sales (Real) (YoY)  FALLS 7.2% YoY

Italy Business Confidence  DOWN to 92.5 from 94.0, Two year low...


All good and gravy!

I am Jobe's picture

Market should rally on this news. 300 points min run up. How does Goldie fell about this. I guess they re still their client s to buy EU Bonds while they short the EU Bonds.

nolla's picture

Ok, anyone, tell me what is the transfer mechanism of ECB's balance sheet expansion into inflation?

As we know, ECB's balance sheet has expanded by about 600bn this year --> what is required for expansion to be visible in inflation AND M3 AND credit expansion?

Latest figures (Nov): M3 declined to 2,0% y/y (exp. 2,8) and credit growth slowed down to 1,7 from 2,5 in late summer.

MFL8240's picture

When does this fucking bullshit end, when Gold is at $900 an ounce?  This is all by design.  So fuckin odvious its actually disgraceful.

I am Jobe's picture

The man behind the curtain is still manipulating the market. The MSM's have no balls to stand up to these thugs.

As long as the government is perceived as working for the benefit of the children, the people will happily endure almost any curtailment of liberty and almost any deprivation.
? Mein Kampf, Adolf Hitler

Do you hear the Slavery on full scale yet. Not alone in Europe but in NA as well. Generations of slavery is set to take place. I guess the IECONOMY really does work to keep the mases from thinking.

fredquimby's picture

I thought EURO had only days to go before certain break up??!! It won't last till Friday, definitive solution required before weekend.....etc etc.





Zgangsta's picture

What will the next ZH headline be, "Obama does not say that Martians will not attack us next year"?

Sandmann's picture

Hardly likely Obama would say anything - he didn't about waging war on Libya and European Media is softening us up for an attack on Syria and possibly is all like the days running up to September 1939 when Deutsche Wochenschau could relay the message from the Wilhelmstrasse that the Reich would defend  ethnic Germans in towns such as Bromberg (Bydgoszcz), where fleeing Polish civilians and military personnel killed between 5,000 and 6,000 ethnic Germans,


We are being hyped up for the next stage of a new Thirty Years War

fonzanoon's picture

those auctions went off pretty bad just now. Euro 1.28

Sandmann's picture

Prof Werner Sinn said much the same thing this weekend from IFO Economic Research Group stating that Cataclysmic Events could take place of a nature not unseen since 1945 when the EuroZone implodes

"Es kann sein, dass im nächsten Jahr größere Eruptionen stattfinden", sagte Sinn Reuters TV. "Wir sind in einer wirklich existenziellen Krise des Euro. Solch eine Krise haben wir in der Nachkriegszeit noch nicht gesehen." Das könne auch politische Folgen haben. "Ich wage gar nicht, mir das alles auszumalen.

LMAO's picture

"she made it all too clear how Germany plans to deal with the PIIGS laggards"

For a moment there I actually read that all the problems were IMF induced:

"PIIGS Lagardes"

Freudian slip?

xcehn's picture

The eurozone breakup is a foregone conclusion and TPTB know it.  Watch what these con artists do, not what they say.  The name of the game is to squeeze every last drop of blood from the taxpayers while the music still plays.  Fiendishly criminal.

TheGardener's picture

I like that "google translation" reference. This kind of
sidekick only a very few understand make the Tyler's unique
and ZH the greatest site there is.

It's not that something went lost in translation from
"Bild"-German to English, it's the original German Bild
quote of that pretty aging bitch that make not much sense in German, unless google-translated from whatever...

boiltherich's picture

It is being reported the same as above in the London Telegraph.  I would like to take a stab at the translation of the translation:

"Some countries have taken part and individuals over the years [have] too much debt. The banking crisis has also driven the national debt. Now the fear is great that they cannot repay the debt.

"We need a triad: over-indebted eurozone nations must submit to a long-term insolvency rule. The others must undertake to reduce debt and stabilize the government budgets. With a debt settlement pact, the debt ratios may fall below 60pc over 20 years. This requires that the short-term interest rates are pushed through [with] mutual guarantees to a realistic level.

"If we succeed with a debt settlement pact, to stick together to stabilize the euro, no significant losses are expected. Failing that, consequences and costs are incalculable."


Too much debt by less than perfectly Aryan nations...OK, we get that, have heard little else out of Germany for two years now.

We need the troika to deflect criticism that it is Franco-German bankers demanding all this punishing austerity.  Non Germans are now our debt slaves and need to just shut up and tow the line we tell them to.  There is only one course of action we agree to, austerity and poverty in the non German countries till they have repaid us.  MAYBE in 20 years time they will have bought themselves back their independence and sovereignty. 

Either agree to our demands or you are screwed beyond calculation (Germany will be fine). 


Gelir's picture

We wish you a very nice continuation of such shares. Thank you that was very helpful admin shares süpersin Sohbet Chat Thanks for admin.nice sharing.very nice..