When a politician is planning a campaign lie, he has to be able to rely on one thing: No one in his own party must come out with the truth prematurely. The Social Democrats adhered to this rule in the 1976 election, when then Chancellor Helmut Schmidt promised higher pensions and then announced sharp cuts after the election. And the center-right Christian Democratic Union (CDU) also closed ranks in 1990, the year of German reunification, when then Chancellor Helmut Kohl appeared on market squares throughout the country to announce that taxes would not be raised. It was a promise that, as we now know, was followed by the strongest postwar increase in taxes and other charges. Current Chancellor Angela Merkel was still an up-and-coming member of the eastern German CDU and Kohl's eager pupil, so it came as no surprise that she urged her party's executive committee to stay the course on Greece at all costs last week. "There is too much talk in Europe about debt haircuts," the chancellor told her party's executive committee at a meeting last Monday. But after SPIEGEL had reported two weeks ago that the Bundesbank, Germany's central bank, had new doubts about Greece's bailout program, the debate over additional aid packages or debt forgiveness was reignited. This would be extremely dangerous, the chancellor told CDU MPs, as it would create "uncertainty in the markets." In other words, she was saying, it was critical to maintain discipline in the debate.
Less than 24 hours later, Finance Minister Wolfgang Schäuble appeared on a campaign stage in Ahrensburg, a town in the northern state of Schleswig-Holstein, and said: "There will have to be another (bailout) program in Greece."...So there it was.
11 comments:
While Singapore and the United States have traditionally enjoyed close defense and security ties, it would be misleading to classify them as clear-cut allies, writes the IISS. This is because Singapore needs to keep its options open in a region where balance of power politics remain central.
The tough talking that Merkel is doing in front of her potential voters during an election campaign is complete rubbish. Neither her nor her predecessors nor the past or current Bundestag have/had any idea what Germany in particularly or Europe as a whole was in for when they dreamt up with other heads of state the concept of a politically united Europe, and the Euro to shove this dumb idea down our throats. We in Germany never got a chance to voice our opinion about this concept. We were just told that the German people cannot be trusted, and in order to have a peaceful Europe in the eternal future we need to accept this.
Merkel and the whole political ilk are selling the German/European peoples out to every loan shark in this world with this common currency. Our taxes and very soon our savings will be distributed to the neediest countries of this Eurozone. When we complain about this to our beloved and tough talking Chancellor she will tell us that there is no other alternative.
DON’T JUDGE MERKEL BY WHAT SHE IS SAYING, WATCH WHAT SHE IS ACTUALLY DOING!
I wish that people would stop talking about a Greek euro exit as if it is an easy option.
Most Greek debt is denominated in euros and would continue to be even if Greece returned to the Drachma. A devalued Drachma would have the effect of making Greeks poorer and perversely increasing the size of the debt.
Any attempt to avoid paying the debt would almost certainly result in Greek expulsion from the EU and being frozen out of its principal markets.
Nobody will lend them money and it will be difficult to buy goods from abroad. Keeping the lights on and providing food to live on will become major difficulties for the government.
If Greece was going to leave the euro then it should have done so before the bailouts. To do so now would probably make a bad situation worse.
Greece is up a creek without a paddle. There is no easy way out for Greece or the rest of the €Z either for that matter.
What a mess
No. Greece can go back to its own currency and default. Experience shows that when countries have done this in the past industry rebuilds and are able to return to the bond markets surprisingly quickly.
Comment like count Recommended by 7 people
Recommend
Report
.
Commenter's avatar London Eye
Today 08:43 PM
Agree, it's the only way for Greece,short term pain but long term gain! Trying to keep this dying Euroland alive is an act of futility. Spain,Portugal and Italy will be next, nothing will change, it will just keep dragging on , year after year, or until there is a violent revolution in one of the countries!
Schroeder's mistake over Greece was due to his hurry to complete Germany's domination of Europe, achieved through economic rather than military means after the two martial disasters of the early 20th century.
Now, Angela's afraid of losing her country's nearly-complete control and dominance of Europe. Total control via a politically and fiscally united EU with its single currency is so close she can taste it. She and her patient, disciplined compatriots want it so badly they'll do just about anything to achieve it.
Dogs do eat dogs, especially if they're of a German political breed.
For German readers here the Election Programm of this Party.
The only point I personally do not agree with is their desire to leave the Euro. With all the other points any patriotic German will agree, especially as none of the Major parties present them, such as:
No-Bailout clause, No Transfer Union, Canadian style filtering for immigrants, possibility to leave the Eurozone etc.
There is nothing right wing about this Party, although it is being smeared and painted in that Corner. It is NOT right of the CDU. It probably is very much German Mainstream, if only Germans would be allowed to take note.
If only Professor Lucke would stop listening to his advisors and drop the anti-Euro stance, this party might experience a similar support as Beppe Grillo's party in Italy with the difference that we are not dealing with a Clown in Professor Lucke and his tean, mostly disgruntled German conservative voters.
Sadly not enough attention is given in Britain and France to this party. The tentacles of Berlin and Brussels seem to extend into their Mainstream Media. So sad.
Germany, Austria, Belgium, Spain, Italy, and the Netherlands shouldn't have been allowed in either, because their debt:GDP ratios each exceeded the 60% entry criterion (which in any case was notional - pick a number, no basis for a currency union).
And I seem to remember that there was a massive transfer of funds related to France Telecom which enabled France to duck under the 3% deficit criterion.
Comment like count Recommended by 8 people
Recommend
Report
.
Commenter's avatar johnward
Today 07:04 PM
Angela has come out and said the obvious , Greece is not fit to be in the Euro and the Euro is more than just a currency.
Well she is right on both counts of course, but the world has to ask itself, why would they be expected to support something via the IMF that the core Euro zone countries know is flawed. Why are the countries of the world being told to support the failures in the Euro zone when in reality it is really a demand to support the ongoing enrichment of the few northern countries in Europe at the expense of the many southern peasant nations?
ST. GALLEN, Switzerland—A successor is rising from the ashes of Wegelin & Co., Switzerland's oldest bank and the target of a U.S. legal takedown for aiding tax evasion by Americans.
Behind the walls of an elegant villa about an hour east of Zurich, Notenstein Private Bank, which acquired a chunk of Wegelin's business, is plotting a new business strategy that is different from its mainstay of managing money for wealthy foreigners.
Notenstein's transition highlights a broader sea change among Switzerland's private banks, which have been roiled by a global crackdown on tax evasion. Many banks must deal with undeclared accounts ...
NO nation should have signed up for a single currency as local conditions much dictate the value. Merkel and Cameron must accept that the EU is NOT Europe. I travel to Portugal frequently and the locals all say the Euro has been a curse as it has pushed up tourist prices and done great harm to their exports.
Who benefits from the Euro? Germany does so they can keep it and allow the rest of Europe to compete fairly by reverting to their own currencies.
UKIP are the only party that will get us out of the EU and back into Europe via an EFTA. We must regain control over our own Parliament and justice system before the EU take us over completely.
Europeans unite against the EU! And viva la revolution!
Pity she only named Greece as the one who should not have been allowed to join. The list should also have included : Spain, Italy, Portugal, Ireland and France. We all knew at the time that the application of the tests was fudged for political reasons and "European Solidarity". The egotistical people running Germany, France and the EU at the time believed that they could ignore the markets. In the good times they could, but chose not to put in place the structures necessary to get through the bad times.
The only two countries which met all the financial tests at the time were the UK and Luxembourg (which was already in a currency union with Belgium).
What she still appears unable to admit is that politics will never be stronger than reality. Without making Euroland a single economic area or expelling the weaker states (or Germany), the Euro economics will never all recover. The Greek economy is fundamentally too weak to exist with the same exchange rate and interest rates as Germany.
Weidmann nails it in one.
This is not about whether the price is too high for Greece to stay in the euro, it's more to do with the cost to the German banks if they exit.
All these bailouts and back-handed deals aren't to save Greece, they are to prop up the European banking system which will be facing collapse if a member country leaves.
Greece holds all the cards here - Germany either pays up or faces a crisis in its own banking system.
Hence the debt relief, loan extensions, haircuts and the IMF betraying their remit (in supporting a currency not a country) - it's all to support the financial system and keep the plates spinning.
But the longer this charade runs, the harder the fall will be.
Post a Comment