Germany's main opposition, the Social Democrats, have upped the ante, saying that Chancellor Angela Merkel must assume greater risks to avert a breakup of the single currency.
Bloomberg has a report on an interview the SPD floor leader, Frank-Walter Steinmeier, gave to the Rheinische Post newspaper.
He raised the pressure on Mrs Merkel to agree to more burden-sharing to stem the euro crisis, claiming that Mrs Merkel, while rejecting euro-region bond sales, fails to say that Germany is already exposed to losses from the debt crisis through the European Central Bank’s bond purchases:
The government should finally be honest about it to the people. If we want to prevent the breakup of the euro zone, it won’t be without risks for Germany.....I have been following the EU. crisis for the last three years and the Muppets in Brussels still have no idea what to do. It gives me no confidence at all in our leaders in Brussels. The numpties in Westminster are not too bright but they beat the nutters in Brussels and Strasbourg hands down.
From debt crisis to food crisis. The UN's food agency has warned today that the world could face a food crisis like that of 2007/08 if countries restruct exports on concerns about a drought-fuelled grain price rally. In its latest update, the Food and Agriculture Organisation said its food price index climbed 6pc last month, after three months of decline, driven by a surge in grain and sugar prices.
Anxieties over extreme hot and dry weather in the US Midwest sent corn and soybean prices to record highs last month, driving overall food prices higher. Grain markets have also been boosted recently by speculation that Black Sea grain producers, particularly Russia, might impose export restrictions after a drought there hit crops.
The FAO's senior economist and grain analyst Abdolreza Abbassian told Reuters: There is an expectation that this time around we will not pursue bad policies and intervene in the market by restrictions, and if that doesn't happen we will not see such a serious situation as 2007/08. But if those policies get repeated, anything is possible.
3 comments:
The market dislocation is unprecedented: "The news is awful! Buy! Buy!".
Of course this makes perfect sense - assuming equity prices reflect some intrinsic value. Currency debasement through money printing means you need more of the monetary units to reflect the underlying value of the asset.
However while debt is real, value is a matter of opinion. And value is not created by central banks, but by the work of people making things.
5 years into the crisis and things continue to slide. We have reached the end of economics.
The german and swiss tax evasion argument gets hotter.
German tax probe prosecutors act on new Swiss data leak (reuters)
while the swiss NZZ speaks of a "Summer Sale for stolen bank data" in Germany, and openly doubts if its worth continuing with the withholding tax deal, if the german federal government can't stop the practise going on at state level. (NZZ, German)
Meanwhile the Financial Times Deutschland cheerfully reports (FTD, German) that the latest purchases CD shows bank customers of UBS moving their finances out of switzerland towards Singapore - and hence out of the reach of the withholding tax - after advice "from highly-placed figures" at the bank.
Last month, state prosecutors in Bern opened an investigation against the managers of the tax investigations office in Wuppertal, NRW, and the a state prosecutor there, for "conspiracy to commit economic spying" (Beihilfe zu Wirtschaftsspionage). They allege that at least one of the stolen CDs contained information that the german tax investigators had specifically ordered. (WAZ, german)
As far as I'm aware it is in the Greek constitution. This may not be the real difficulty though, but if it is a legal fact it may of course be used as an obstacle.
We hear a lot about the German constitution, well, there is a Greek constitution, and both need to be treated with the same respect. Or is there some idea of hierarchy at work here?
Article 103
1. Civil servants shall be the executors of the will of the State and shall serve the people, owing allegiance to the Constitution and devotion to the Fatherland. The qualifications and the manner of their appointment shall be specified by law.
2. No one may be appointed to a post not provided by law. Special statutes may provide for exceptions in order to fill unforeseeable and urgent needs with personnel hired for a certain period of time on a private law contract.
3. Posts of specialized scientific and technical or auxiliary personnel provided by law, may be filled by personnel hired on private law contracts. The terms of employment and the specific guarantees under which this personnel shall be employed, shall be specified by law.
4. Civil servants holding posts provided by law shall be permanent so long as these posts exist. Their salaries shall evolve in accordance with the provisions of the law; with the exception of those retiring upon attainment of the age limit or when dismissed by court judgement, civil servants may not be transferred without an opinion or lowered in rank or dismissed without a decision of a service council consisting of at least two-thirds of permanent civil servants.
Recourse against the decisions of these councils may be sought before the Supreme Administrative Court, as specified by law.
5. Highest civil servants holding posts outside of the civil service hierarchy, persons directly appointed on an ambassadorial rank, employees of the Presidency of the Republic and the offices of the Prime Minister, Ministers and Undersecretaries may by law be exempted from permanency.
6. The provisions of the preceding paragraphs shall apply to the staff of Parliament, which in other aspects shall be entirely subject to its Standing Orders, and to the civil servants of local government agencies and other public law legal persons.
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