Monday, 29 August 2011

"War On Every Front"

Ambrose Evans-Pritchard in the Telegraph writes that this coming month, or even next couple of weeks, will decide the future of Angela Merkell, Germany's destiny, and the fate of the Euro:
German Chancellor Angela Merkel no longer has enough coalition votes in the Bundestag to secure backing for Europe's revamped rescue machinery, threatening a consitutional crisis in Germany and a fresh eruption of the euro debt saga.

Mrs Merkel has cancelled a high-profile trip to Russia on September 7, the crucial day when the package goes to the Bundestag and the country's constitutional court rules on the legality of the EU's bail-out machinery.

Mrs Merkel's aides say she is facing "war on every front".
There are ever louder concerns being aired in Germany about the lack of democracy in a fiscal union which the Euro survival depends on:
Christian Wulff, Germany's president, stunned the country last week by accusing the European Central Bank of going "far beyond its mandate" with mass purchases of Spanish and Italian debt, and warning that the Europe's headlong rush towards fiscal union stikes at the "very core" of democracy. "Decisions have to be made in parliament in a liberal democracy. That is where legitimacy lies," he said.
Merkel therefore faces defeat which would surely start the unravelling of the Euro. But I wonder if, despite their reservations, the Germans really will put their concerns above the EU knowing what the ultimate consequences will be? Would they be prepared to take the inevitable blame over the fall of the EU?

I doubt it. The German Constitutional Court has a track record of wriggling rulings out in favour of the EU on these issues (it will do so again) and then there's the boundless stupidity of the German Government as AEP acknowledges (my emphasis):
While the bill is likely to pass, the furious debate leaves no doubt that Germany will resist moves to boost the EFSF's firepower yet further. Most City banks say the fund needs €2 trillion to stop the crisis engulfing Spain and Italy.
It's important to appreciate the almost limitless determination to keep EU and the Euro going come what may. So a bumpy September awaits the Euro but I suspect it will continue albeit in an even more crippled state than before.

5 comments:

  1. All eyes on Deutschland, where all the running appears to be made at the moment.

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  2. Indeed absolutely right, Deutschland will either make or break it - whether they are willing to break it yet is a different matter, but their patience is not infinite.

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  3. I hope this gets approved, then Germany will start to feel the pinch, they will will then forbid any more and break the EU, getting the blame. But the best bit will not be the fall of the IV Reich, no, it'll be that Germany will see it's export industry diminish as their own currency appreciates more in line with their economy.

    Goodbye Germany.

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  4. cuffleyburgers30 August 2011 10:03

    This is starting to get very scary indeed; these people are in a state of total denial.

    It's all very well to say that the worse it gets the better it is - we know what happens when Germany gets really really upset about something...

    The damage which is being done is quite literally incalculable and they still refuse to do what needs to be done.

    Merkel is now shafting the German populace big big time, quite apart from putin herself in very severe personal danger she is storing up such a very large amount of trouble... I'm fucking terrified actually.

    And Cameron/Hague are doing nothing to safeguard the British people. They should be fucking impeached for gross negligence.

    It is now I think only a metter of time before the political class of all European countries starts to face a serious reckoning, and quite frankly it can't come soon enough.

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  5. @Anon, I wish no ill feelings on the Germans - I lived there for 3 years and, make no mistake, they're being screwed by the EU project as much as us and they also hate it as much. I hope the Germans do break it up but it's the EU elite that needs shooting not Germany.

    @cuffleyburgers Completely agree with your sentiments, it is very scary and we in the UK won't escape the consequences of the inevitable Euro breakup

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