One of Angela Merkel's key allies has dampened hopes that Berlin may cave in – insisting that Germany is not about to unleash the Big Bazooka that other European leaders (notably David Cameron) have called for. Michael Meister, finance spokesman for Merkel's Christian Democratic party, said this morning that Germany is sticking to its current plan for the eurozone crisis. Meister told reporters that: We don't have any new bazooka to pull out of the bag. That means Germany is sticking to its position that austerity and budget cutbacks are the short-term solution to the crisis (along with bank overcapitalization and a haircut on Greek debt). In the long-term, it wants changes to the EU Treaty to bind eurozone members closer together. The Big Bazooka (das große Geschütz?) option would be for the European Central Bank to launch a quantitative easing programme to mop up large quantities of sovereign debt, followed by eurobonds – allowing weaker nations to borrow with the security of Germany's credit rating behind them. Both options, though, remain deeply unpopular in the eurozone's largest economy.
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Tuesday, November 22, 2011
One of Angela Merkel's key allies has dampened hopes that Berlin may cave in – insisting that Germany is not about to unleash the Big Bazooka that other European leaders (notably David Cameron) have called for. Michael Meister, finance spokesman for Merkel's Christian Democratic party, said this morning that Germany is sticking to its current plan for the eurozone crisis. Meister told reporters that: We don't have any new bazooka to pull out of the bag. That means Germany is sticking to its position that austerity and budget cutbacks are the short-term solution to the crisis (along with bank overcapitalization and a haircut on Greek debt). In the long-term, it wants changes to the EU Treaty to bind eurozone members closer together. The Big Bazooka (das große Geschütz?) option would be for the European Central Bank to launch a quantitative easing programme to mop up large quantities of sovereign debt, followed by eurobonds – allowing weaker nations to borrow with the security of Germany's credit rating behind them. Both options, though, remain deeply unpopular in the eurozone's largest economy.
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4 comments:
It is a continual source of astonishment that the US has not been cut to BBB. Its capacity to trade its way out of its difficulties in the short term is nonexistent given electioneering and politicking, and in the medium to long term, very doubtful. It perhaps appropriate that the US stand 'with' Greece.
it is not clear yet either whether Greece will get its trance of 8 billion. With Xmas around the corner, one suspects the politicians will promise anything. But in the New Year, the Greek tragedy will begin another European tour
the experts that have been wrong over and over again. Fine if you post what they say, but if this is to be fair reporting, I think you should also post what they have said before that was so wrong. Also you should post what their conflict of interest is and why they might say 'x"
heck knows had you when quoting rating agencies mentioned they were being paid by the banks to say x about CDS etc this BS would have been in the open a lot sooner.
seems remarkable that Spain can be seen as such a short-term risk (having just elected a new PM with a mandate for reform).
I don't think it's that remarkable. Whoever's in charge won't be able to turn the tide because there is a toxic mix of external financial pressure and internal political pressure.
The Frankfurt group is probably already rummaging around in the box of discarded Spanish bankers looking for a likely 'technocrat' to run the place.
David Camerons words yesterday offer the clearest insight yet of the horrors that are coming down the line (next 6 months??) he knows what we dont... this is classic positioning for an almighty fall. its been along time coming...
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