Skip to comments.Germany unmoved by French pleas for more ECB action
Posted on 11/24/2011 10:56:50 PM PST by bruinbirdman
French appeals for Germany to sanction extra powers for the European Central Bank have been firmly rejected, despite warnings from politicians, economists and even the Vatican that it is the only way of "averting a catastrophe".
Italian premier Mario Monti (right) pledged to balance the budget by 2013 - but failed to prevent the country's 10-year
bonds from closing in the danger zone again at 7.13pc
Angela Merkel was unmoved by another roller-coaster day that saw Portuguese debt being downgraded to junk status, Italian bond yields pushed into the bail-out zone, and doubts cast over France's AAA rating: the German Chancellor refused to allow the ECB to become Europe's lender of last resort.
Ms Merkel instead used a three-way summit with France and Italy in Strasbourg to insist that new treaty powers to intervene and punish sinner states remained the key focus of Europe's rescue efforts. She said: "The countries who don't keep to the stability pact have to be punished those who contravene it need to be penalised. We need to make sure this doesn't happen again."
Even suggestions that the ECB could extend longer loans to countries over a period of up to three years appeared to be ruled out. Ms Merkel said: "The ECB is independent, the modification of the treaty does not concern the ECB, which is dealing with monetary policy and financial stability. We are worried about a fiscal policy. It's a very different chapter. It has nothing to do with the European bank."
But at the start of the day, Jean Leonetti, French minister for European affairs, said: "France wants the ECB to have the same role as the Federal Reserve... Why is the euro under attack? It's simple. In the US there's a Federal Reserve. Europe has
(Excerpt) Read more at telegraph.co.uk ...
Churchill also expressed his desire that day for a future United States of Europe: it should be built by the English; if the Russians built it, there would be communism and squalor; if the Germans built it, there would be tyranny and brute force.
The Churchill War Papers, p. 38
Thanks for the post. Interesting read
Bu... Bu... PLEASE, Mrs Merkel.
It’s the only way we can save the future for retiring 50-yr old Gub’ment employees in Greece and Portugal!
Not much relevance to today..
These pinheads are going to sweat sooner or later.
Germany’s financial leaders are only now finally beginning to understand what those of us who have done the math on EU-zone debt have understood for a year+: Germany simply does not have the resources to prop up the ECB to the extent necessary to prevent the Euro from imploding.
As such, Germany now has two paths ahead of it:
1. Back up the Euro with their own money and debt rating, which will work (now) for, oh, perhaps a year. Then when the numbers become apparent, they lose both their money and debt rating... for OTHER countries’ debt, not their own... or
2. Start planning for a significantly reduced Euro-zone, where they go back to the letter of the Maastrict Treaty and start enforcing the deficit limits therein, on *everyone*.
The brutal truth is that no common currency can work in Europe. The Med nations are spendthrifts and have been economic basket cases for debt holders going back to WWII or even further back (eg Greece). The northern states have both economic power and financial responsibility bred into them, which cannot be imparted to southern tier countries with any amount of lecturing.
Do remember, I don't know the complete situation and definitely not the solution, just pointing out what I know -- portugal did not lie about its finances like Italy or Greece and they did not spend too much and their banking system was not as risky as Ireland's -- their problem is that their economy is weak and they are part of the eurozone.
They SHOULD put their retirement age at 65, I agree and I don't know the extent of their healthcare and other benefits, but a lot of government spending should be cut -- i just don't know if there are some really serious things that are being cut (would be good to see the actual list of demands, but I can't read portuguese!)
--> actually it was Churchill's jingoism behind that statement that the USE should be built by the English
LOL, germany finally took europe and did not fire a shot.
--> Not really, Germany has been demanding, but it is the one lending the money to cash-strapped countries. Borrowers are in no position to say "i won't safeguard the money you lend me, but I still want it".
I don't like Germany's history or Germany today (after all, I have Polish in-laws!) and have imbibed a lot of their distrust towards the Germans, YET, come on they have a point -- why should they work until 67, pay their taxes on time, follow the rules and then have to pay out money to Greece or Italy (to a lesser extent) -- I know for a fact that in Greece and Spain cheating on taxes is a national past-time and they got great benefits and money from the EU when they joined. Italy, less, but still they overspend compared to Germany
The Red report details how the Nutzis taught they could retain a united Germany by holding off the soviets until they could secure good terms from the West
That didn't happen and the East Germans were pyschologically changed from the West Germans
the Soviets never allowed any form of German nationalism and that still holds true today
the Red report is a product of its time and for a future that never happened.
if they really "took europe" then how come Germans are working longer while the rest of the eurozone relaxes on German money? the Germans have tried to subsume their nationalism in a kind of European nationalism and its failing IN Germany where people don't want to work until 67 to let others retire at 50
Will the Market Nose Dive Monday?
to your points
1. they may be foolhardy enough to try this -- and you are correct that it seems a dead-end choice
2. this makes more sense, but quite frankly, who meets the Maastricht treaty today? at a pinch (with no facts at my fingertips), I'd say next to no one besides Luxembourg.
A smaller Euro-zone makes sense -- probably excluding Portugal, Italy, Greece. Spain actually better follows the Maastricht guidelines than Germany as i've read (not thoroughly). France and Germany will be part of that central region and the Benelux countries will tag along.
Estonia and Latvia WILL stay -- they have been desperately trying to tie themselves to every country possible to keep the Russian bear at bay.
Slovakia should learn and exit -- it gets no real benefit (anecdote -- on the Polish-Slovakian border, before Slovaki joined the EU zone, Poles used to go across to buy stuff (it was cheaper in Slovakia), but now the reverse happens) imho
who else? I think they would kick out Ireland (who i'm beginning to strongly dislike since their ship to the "palestinian territories")
Italy would be in better shape without the euro -- my Italian friends tell me that when the euro came, prices DOUBLED, and the cost of living in Italy is too high now.
Spain would be in doo-doo, but they got a lot of money from the EU in the form of infrastructure building (their roads etc. are better than Germany's imho).
Portugal would be better off
Greece would be in deep doo-doo as they have been made lazy by sucking at the EU teat for too long
How about today!
Right now in Asia, Europe there is almost a general liquidation.
Equities, oil, gold all down. Bond yields up. Dollar up across the board.
True. the Portuguese and Greeks can cut themselves loose from the teat. pinging nathanbeford and berlin freeper — freepers in Germany for the German perspective
Well now...what you say is true...the PIIGS, Greece first, MUST leave the euro to GROW.
FOLKS, the key here to remember DEFLATION, and these NATIONS (they’re not “states” to be exploited as with Phony-Care here in the U.S.) must leave the euro to GROW. Look at that Italian yield today, above 7%..how long before 8%>?
But NOT before to WATCH out for an attempt by the PHONY paper makers to try their own version of a Phony-Care scam to prevent temper hot inflation, >>>> IF they pull a ECB Sovereign backstop attempt upon Germany, and the Germans cry ‘uncle.”