Merkel is running out of patience with the eurozone

In2minds

Merkel - in her own way she is as mad as Gaddafi.

TomTom

Merkel is history. She will be gone by Christmas. She and her FDP allies are being destroyed in State Elections and after Bruederle's stupid comments yesterday she is toast. Look to Per Steinbrueck as Germany's next Chancellor and maybe he can impose order on this chaos

Bellevue

The wheels are coming off the euro project. What fun!!!

Maggie

To an economic illiterate it looks as though the stupid Portugese have borrowed too much money/made too many risky investments are now refusing to pay their debts and so more sensible and responsible countries are going to have to pay their debts for them. George Osborne must demand a good return for any help we are obliged to give them. Land would be preferable. Let's annex the Algarve to start with.

purpleline

Germany concerns me greatly, they are using a mercantile policy to smash their weaker EU partners into submission and have moved into bed with Russia.

They are on an export drive to Asia (China) and will kill other EU nations as a result by creating a higher valued Euro at 1.42 when a more applicable rate of 1-1 would kick-start the Med economies.

China are happy they have a constant supply of German heavy & luxury Cars on tap from a country killing its EU partners.

Merkel is East German, her heart lies in the East & communism >state capitalism, Russia, China, India, Brazil<.

Ask the question, Where did all the Stasi and communists go when East Germans crossed over into West Germany. Not one arrest, which is amazing given some of the actions they took to suppress their fellow East Germans.

Hence the abstention at the UN with Russia & China, India, Brazil.

The only way out of the Euro mess is in fact the nuclear option of Germany leaving the common currency bloc. This would allow the rest to devalue, the prime missing part of any recovery IMF plan.

The above are well documented facts hope it survives censorship as we need to understand what is currently shaping up in Geo politics & Realpolitik

denis cooper

I expect Merkel will get whatever she wants, as usual, and I expect Cameron will do whatever she wants, as usual.

"Well, David, are you ready to sign up to the treaty amendment we agreed, so we can cover up the illegality of the bail-outs we've already had to do and make sure that from 2013 any bail-outs will be legal?"

"Oh yes, Angela, and I've even got Parliament to give me an unconditional mandate to agree to that amendment without asking for anything at all in return, and of course without any possibility of a referendum, just as you wanted."

Cynic

It's like watching doctors struggling to keep a patient alive despite brain death having occured some time ago. The sooner the Euro is allowed to slip away peacefully the better. It's time life support was switched off.

GawainTowler

I note the flagged difference betwen "Euro anger" and "Euroscepticism". I suspect that what you draw is a false distinction. What Germany doesn't have is a recognised political outlet for their growing exasperation with the Eurozone and the EU as a whole. Sooner or later, and I suspect sooner than later it will. And when it does I think anger will sublimate to political scepticism very quickly.

AF

Germany derives many benefits being in the Euro zone,namely the relitively low rate of exhange,courtesy of the less well off countries.If Germany never had this shield to work behind its exchange rate would be such that it would not enjoy the thriving export business of its high ticket items.
German banks over the years have been throwing cheap money at the southern european states to the extent that they became sick on it,not unlike putting kids in charge of the sweet shop,no restraint.
Twenty odd years ago in Portugal and Spain you could barely borrow enough for a morgage,even if both couples enjoyed good saleries,lawyers doctors and school teachers in the main rented.When the cheap money arrived everyone pigged out on it,inevitably house prices soared as did most other commodities,people enjoyed a higher standard of living,second homes,cars ,holidays but it's come at a price.Germany shoudn't winge so much as it has benefited the most.
France much the same and the C.A.P.policy.
They should share the spoils with the others let them get on with it.

Cjamesk

And yet we the people will have to pay for the decisions of this cartel. Like a fish struggling for air out of water only time will put a welcomed end to this all.

So can anyone tell me the pros of an "ever closer union" one of which we the electorate have no say, no representation apart from heavily lobbied MEPs that would put the former USSR to shame.

I have zero sympathy for the Irish you made a pact with the EU devil now live with it.

John Moss

Ireland should join the UK's currency union.

yank

Merkel is a reflection of her people, she's just not as strident about all this madness as they are.

It's the next guy who'll be backing up the trucks full of deutschmarkes to the banks, pretty soon here, when we get to the rat-killin' .

Publius

@denis cooper and cynic

-- Quite. We cut at home, and use the money to bail out the Euro zone of which we are not even a member.

Even if it were a sensible policy it would be bad enough. But it isn't a sensible policy.

It is merely throwing good money after bad in an attempt to stave off the inevitable and allow various Euro boosters to save face.

Baron

Merkel’s bigger worry is the Germans are running out of patience with her.

TomTom

Funny to read so much off-base stuff about Germany, but then again England has such ignorance. Firstly talking about Germany as a monolithic bloc as if Corporate Interests and Citizen Interests are identical is about as useful as saying the British population is devoted to the interests of the City.

Think about the Economics. If Germany shares a currency with France and Spain and Italy and Greece those countries get a higher relative price for food exports to Germany than they would against the D-Mark. They are NOT industrial competitors. The Welfare Cost to German Consumers is lower Real Wages the Profits accrue to corporate interests.

In the case of Britain, Devaluation inflicts Welfare Costs on Consumers by raising food and energy prices because it is intended to shift GDP shares from Wages to Profits.

dorothy wilson

I see there is an interview on Der Spiegel's online site with one of Merkel's economic advisers. I haven't read it in detail but he seems to be saying that Germany is in danger of becoming vulnerable to an attack from the markets.

I've always had an inkling in the back of my mind that it could be Germany that pulls the plug on the euro.

Note to Publicus: You should blame Darling for that. He signed an agreement for the UK to contribute to the euro's bail-out package in the short interval between Labour losing the election and the new government being formed.

Maggie

Portugal has 382.5 tonnes of gold reserves. They shouldn't get a penny till they've sold them and all their other assets.

Baron

Maggie, what the Portuguese have done differs not from what other countries were guilty of, too, you articulate it well. The problem the southern burghers of the EU are facing today is how to re-finance, i.e. how to replace the borrowings they had indulge in before the disaster struck, at a cost that will not cripple them. The markets could be persuaded to do the loans roll-over, but at a cost, hence the package, which sort of guarantees the new loans, hence keeps their servicing costs lower, replaces some of the old loans, again at a reasonable cost to them. That’s what relatives are for.

am surprised the Chinese haven’t yet figured their massive surpluses of foreign IOUs could be held in currencies other than the falling greenback like the Euro, keep the renminbi undervalued against it, hence keep their exports to us going abit longer. The bad boys of the City are missing an opportunity here, too.

paulop

Dear Maggie,
your own stupidity is unbelievable! You simply have no idea of what you are saying...Not just economic illiterate, you sound just illiterate, period.

TrevorsDen

Publius - I believe Labour committed us to this support but equally I think the current govt have withdrawn from supporting the Eurozone.

Merkel was born in Hamburg.

John Montague

You people seem to forget.. it's our banks who have lent most to the Irish, not the French or the German ones.

The SPD's Herr Steinbruck is a pretty firm pro-European, who sees a multipolar world emerging from US financial decline. If he's the one who will benefit most from Sunday's elections, (and I agree that that's a good call) that doesn't exactly indicate that Germany is about to ditch the Euro.

He was even mooted as a possible EU commissioner at one stage.

Publius

@dorothy wilson
"Note to Publicus: You should blame Darling for that."

I do. And his grim master, Brown. And Balls too, who doubtless had a hand in this particular elephant trap.

But it really is time for some unilateralism here, instead of endless bleating about how we have no choice and references to bogus legality and illegality.

As for Germany, I'm a big fan. They knuckled under while everyone else went on a binge, and I don't blame them for resenting that they are now expected to bail out the bingers.

As for Germany benefiting from a low Euro, the Germans would do just as well if they had their D-mark back. It is a question of hard work and of character, not a question of systems.

Trouble is, with this one-size-fits-all Euro mess, Spaniards, Greeks etc are now expected to be Germans. They aren't Germans. They will never be.

But economists think that because they can refer, in their spreadsheets and theses, to human beings as economic units, then that is what human beings are.

It is the fallacy that almost all economists fall into.

jaybee

Let Germany go back to the Deutschemark and the French can go with it. Its their policies that have wrecked Portugese and Greek industries. If Germany and France genuinely want a European union then let them fairly distribute the wealth in it, and not treat other Euro countries as second rate. If not the Portugese should take the view they will pay when they can and not be bullied by selfich Mrs Merkel.

denis cooper

dorothy wilson & TrevorsDen -

I don't think we've got any closer to discovering the truth about this since Douglas Carswell wrote about it in January:

http://www.talkcarswell.com/show.aspx?id=1747

"How did we end up in the Euro debt union?"

He concludes:

"Seeing how Parliament had not approved the deal, incoming ministers must have known that they could have quashed the whole Darling deal, had they sought to."

However as I added in a comment on that article:

"Darling, and Osborne, each could and should have refused to allow any UK participation in any eurozone bailouts on the grounds that they are illegal under the treaties; and either or both could have made it clear that if other EU countries tried to make any fuss about the UK standing aside then the reason would be made very public rather than being glossed over as Cameron did in the Commons on December 20th ..."

Which is, of course, the purpose of the proposed treaty amendment which has just been unconditionally supported by both Houses of Parliament:

http://www.europarl.europa.eu/meetdocs/2009_2014/documents/econ/dv/conseuco(2010)00033_/conseuco(2010)00033_en.pdf

It would add an extra paragraph to Article 136 TFEU to over-ride the "no bail-out" clauses in the treaties, so that eurozone bail-outs could be arranged legally rather than illegally as at present.

TomTom

Merkel was born in Hamburg.

Erich Honecker was born in Neunkirchen, Saarland.

Gustav Dahrendorf was born in Hamburg but signed the agreement in 1945 merging the SPD into the SED in the GDR

Since Merkel's family moved to the GDR and she was in charge of AgitProp for the Communist Youth Movement and gained her role as Kohl's creature and is a complete tactician without vision or strategy, one might say she is a GDR Apparatchik

Fernando

Paradoxically, nothing would have destroyed the eurozone quicker than if we had been members. Given the size of our banking sector, the lax supervision during the Brown/Balls era and a budget deficit as a percent of GDP twice that of Portugal, we would have tested the system to breaking point. Thatcher, Hague, Brown et al deserve our thanks for keeping us out. Frau Merkel, however, has reason to feel even more gratitude.

TrevorsDen

Mr Cooper - my memory is that (I think in the Autumn Statement) Osborne said that there would be no more UK participation in EU bale (bail?) outs. He regarded Ireland as a special case. I hope the Irish appreciate us.

alleagra

Paulop - the thing about abuse is that it's cheap, easy to scribble and the dispensing of it rather pleasurable. It's also pointless, indeed a waste of space unless accompanied by some sort of argument or telling point. Do you have such to offer? Let's have argument not name calling.

denis cooper

TrevorsDen -

Yes, and my memory is that Tory politicians emphasised that EMU would NEVER lead to one EU member state being expected or even allowed to bail-out another EU member state, because any such bail-outs were specifically prohibited by clauses in the Maastricht Treaty.

Which are still there in the present treaties, but have been broken.

As openly admitted by French Finance Minister Christine Lagarde last December :

"We violated all the rules because we wanted to close ranks and really rescue the euro zone."

"The Greek and Irish rescues - 110 billion and 67.5 billion, respectively - and the creation of the bailout fund were, Ms. Lagarde said, "major transgressions" of the Lisbon Treaty that is the European Union's governing document. "The Treaty of Lisbon," she says, "was very straightforward. No bailing out.""

2trueblue

Good old Darling. Why on earth did no one stop him setting us up for any link with their debt? We do not belong to the euro so it is not our problem. Good old Liebore on their scorched earth policy and being incontinent with our money, thanks a lot.

James

Says WHOOOO Malta is in dire straits??? Malta's economy is a top five performer!! The Spectator seems to think that just because Malta's so close to Italy, then it must naturally follow suit.

Well, has the Specatator actually bothered to check Malta's statistics before publishing that preposterous allegation? Based on... hearsay and hushed whisphered tones.

David Blackburn

James,

Thank you for your comment, I hope my explanation above is clear.

Paulop

If Maggie can get away with insulting the portuguese, can I also just say the brits are stupid? You have to decide on your policy either you allow insult or you donīt but you should be coherent!

They can tek it

It's Malta GC by the way.

Dimoto

The blog post reads like the ravings of Ambrose Evans-Pritchard.

Baron:
"am surprised the Chinese haven’t yet figured their massive surpluses of foreign IOUs could be held in currencies other than the falling greenback like the Euro, keep the renminbi undervalued against it, hence keep their exports to us going abit longer".

Ah, but they have, long since.
There are no flies on the Peoples Bank of China.

Anytime now, we can expect Portugal to start wittering about a Luso union (with Brazil and the former African territories) as an alternative to the Euro zone.

It's a bit like the crusties on here going on about the "Anglosphere" as the answer to all of our problems (even though the US, Canada, Australia etc etc would probably be appalled at the notion).

Mark Sciberras

Even with the disclaimer the claim this article makes that malta might soon need a bailout speaks volumes about the hidden agenda that underlies much of British journalism, of denigrating anything connected to Europe, that evil hulking mass across the channel. Not only is the Maltese economy doing pretty well as the disclaimer points out, speculation is unlikely to affect the Maltese economy. This is because unlike Spain or Portugal (or the uk) the Maltese government satisfies virtually all its debt requirements from within malta, without resorting to the foreign markets that would make it a target for speculators. Maltese govt bond issues are always oversubscribed often many times over. Yet more best of British tabloid economic reporting.

Ken Bishop

Question: why do contributors write "Euro" with a capital "E"? Nobody does that for "dollar" or "pound".

paulop

To an economic illiterate it looks as though the stupid Brits have borrowed too much money/made too many risky investments are now refusing to pay their debts and so more sensible and responsible countries are going to have to pay their debts for them.

paulop

To an economic illiterate it looks as though the stupid Irish have borrowed too much money/made too many risky investments are now refusing to pay their debts and so more sensible and responsible countries are going to have to pay their debts for them.To an economic illiterate it looks as though the stupid Irish have borrowed too much money/made too many risky investments are now refusing to pay their debts and so more sensible and responsible countries are going to have to pay their debts for them.

John Montague

why do contributors write "Euro" with a capital "E"?

I suppose that's because the euro aspires to the status of the Deutschmark, which was allways capitalised.

Salmondnet

Paulop. There there. The thing about insults is that they only really hurt when there is a fair amont of truth in them. Try having a lie down in a darkened room.

A. MacAulay

There is a lot of diffuse unease in Germany. Many, many people have become uncoupled from the political process which offers a picture of dullness and posturing and does what it wants too anyway, elctorate be damned. There never was much support or interest in the euro. The man in the strasse new full well that Italy, Greece, Spain, Portugal and France as well were all dodgy partners and that abandoning the Mark meant one day picking up their bills. An electorate used to not being asked to make any serious choices just accepted their fate with a murmur and a grumble. No serious politician, no important 'paper or programme called anything in to question or provided any kind of alternative to the party line from Bonn-Berlin. The result is sudden explosions of public rage against side-shows like train stations in Stuttgart.

Meanwhile Merkel has completed her cull of all talent or intelligence within the CDU where she grinds any or all real or potential rivals to dust. This leaves an effectively rudderless bunch of twerps to blunder from one political pothole into the next. That a wobbly geek like zu Guttenburg, whose capabilities and upbringing destined him to be CSU Burgermeister in his home town, should be hailed as a glamourous pol with talent galore is a sure sign as to how desperate it is in the ranks of Germany's conservatives.

denis cooper

A. MacAulay -

It was to reassure the German people that they would NEVER have to pick up the bills for other countries that the German government insisted on having "no bail-out" clauses inserted into the Maastricht Treaty, which have been carried over to the present treaties and which are therefore still part of EU law.

EU leaders, including those from the UK, know very well that the eurozone bail-outs are illegal under the present treaties, which is why they've just agreed to make an amendment to the treaties to legalise bail-outs in the future - but only from January 1st 2013, when the amendment would come into force.

This is what the President of the European Council really meant on Friday when he said:

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/120294.pdf

"we agreed on the Treaty amendment needed to give full legal certainty to the Stability Mechanism".

Of course in a carefully prepared statement he'd avoid telling the world's media the unvarnished truth that the bail-outs involve massive breaches of the unamended treaties, but French Finance Minister Christine Lagarde did say exactly that in an interview with the Wall Street Journal in December:

http://online.wsj.com/article/SB10001424052748704034804576025681087342502.html

"We violated all the rules because we wanted to close ranks and really rescue the euro zone."

"The Greek and Irish rescues - 110 billion and 67.5 billion, respectively - and the creation of the bailout fund were, Ms. Lagarde said, "major transgressions" of the Lisbon Treaty that is the European Union's governing document. "The Treaty of Lisbon," she says, "was very straightforward. No bailing out.""

A. MacAulay

denis cooper. Exactly! And the only persons to seriously question this farce are a bunch of put-out-to-pasture professors who will try to bring it before the Bundesverfassungsgericht. That's it. No opposition party has picked up the guantlet because all adhere to the euro-consensus even though they know it to be against the will of the people and contrary to treaties they themselves signed.

Brasidas

AArgh. A proper conservative would want the Germans to rule us and the rest of Europe. In the long run it is our only defence against anglo-american liberalism which is taking us on a journey to we don't know where.

yank

Brasidas, it will be the Germans, along with their Russian buddies, who rule you. And yes, it doesn't take much tea leaf reading to see it, and that the US is moving matters to that end.

A. MacAulay

The state election debacle is further evidence of Merkel's cabinets complete lack of instinct. This government is seriously adrift and accident prone.