Will Mrs. Merkel Wake Up in Time?
Helmut Schmidt, Germany’s 92-year-old former chancellor, sent a pointed message to his present-day successor, Angela Merkel, this week. Shortchanging Europe damages Germany, he warned in a speech in Frankfurt. “Of course the strong should help the weak,” he said, just as Germany was helped by America after World War II.
Does this mean that Germany will get to occupy the countries she helps with her military force and write their constitutions also?
We hope Mrs. Merkel heeds his advice. As of Friday, she was still blocking the European Union from bolstering its inadequate bailout fund. She does favor bigger write-downs of Greek debt (German banks have shed their exposure), which must be part of any solution. But other countries cannot afford to go along without the European-financed bank recapitalization that she opposes.
IF it's so god damned important to the NYT editor that "other countries cannot afford to go along without the European-financed bank recapitalization that she opposes" then why not have the U.S. finance the other countries?
Europe’s leaders have now decided to defer crucial decisions to midweek — not much time to do what they have failed to do for a year and a half: create a realistic recovery program for Greece, keep the debt crisis from engulfing Italy and Spain and recapitalize European banks so they can survive the write-downs ahead.
How pompous of the Times to tell European leaders what they must do!
Here is what Mrs. Merkel isn’t telling her citizens: A Europe in a downward spiral of austerity and recession will buy fewer German exports. A disorderly Greek default and downgrade for Spain, Italy and France could split apart the euro, leaving Germany with a much less competitive exchange rate than it enjoys today. The damage to the European Union, which has smoothed Germany’s postwar reintegration, would be enormous.
Can't wait one day until I read in the NYT, the Trib, WaPo, etc something like this sentence: "Here is what Preznit OBUMMAH isn’t telling his citizens: A world in a downward spiral of austerity and recession {because of the manipulation of the stock markets, the housing markets, the commodities markets, will buy fewer American exports. And besides we don't make anything for export any more save for pornography, pot, weapons systems, and firearms (U.S. bullet manufacturing has been outsourced to China). This is all a natural and predictable outcome of the international corporate welfare state, where ginormous international corporations, answerable (in theory) only to their shareholders (in practice, only to their boards of directors, and there is so much corporate inbreeding in who sits on such boards that you are basically looking at an atrophying bloated system that requires very mindless populations, content merely to shop for cheap shit, and never EVER struggle to overthrow the so-called 'international order.' Once the flames of revolution hit the fan, the old order will be very rapidly fading."
Instead, Mrs. Merkel has gone along with conventional German wisdom that the earnings of frugal, hard-working German taxpayers should remain at home. (We'd say the same for the earnings of frugal, hard-working American taxpayers, but, in a 22.5% unemployment environment, business can be very miserly in what it pays its employees, many of whom realize they are god-damned lucky to have a job in the first place: besides, ANYBODY in the lower 99% can be out-sourced!" She has bowed to anti-Europe conservatives in her coalition, agreeing that all further German contributions to European rescue efforts will be submitted to Parliament in advance. That means that any hope for a breakthrough now depends on Europe convincing Mrs. Merkel of what’s needed and her then convincing Germany’s Parliament.
And this is as it should be - what is a European country's first loyalty? To itself, or to the European Union? It is not as if it is the United States of Europe, and nowhere was it e'er write that the EU must last forever, and BESIDES, why did they let in some of those fucked up countries that are more Mediteranian the You're-A-Peein?"
To be credible, any solution must be generously financed and tackle more than just the financial symptoms.
So the Times is advocating the Germany bail out the other fucked up countreis who fucked them own selves up by speculating in the housing bubble? FORBID IT ALMIGHTY GOD!
Without bigger write-downs and more scope for growth, Greece will sooner or later default. If Europe keeps insisting on growth-killing austerity — rather than structural and labor market reforms — Greece will never be able to recover and pay back its debt. Without a bigger bailout fund, Italy and Spain could soon be unable to pay their bills. If countries cannot draw on European funds for bank recapitalization, more countries, including France, will be dragged deeper into debt.
Unless they grow a set of balls and resist! Why should a well-run conservative country shoulder the burden of bailing out the other countries? And what the fuck is so wrong with defaulting on one's debt? Isn't that why the invented bankruptcy in the first place? And the idiot US investment banks that GAVE these fucked up countries the money - LET THEM TASTE THE SHIT THEY HAVE COOKED UP!
In July, European leaders agreed to increase the bailout fund to $600 billion. It is already inadequate. To meet the new challenges of Italy, Spain and bank recapitalization effectively, somewhere between $2 trillion to $3 trillion will be needed. Some of that may have to come from the European Central Bank.
Can remember no calls by the Times that the US bailout fund was inadequate (although it was).
At the same July summit meeting, Europe’s leaders acknowledged that some Greek debt was unpayable and proposed voluntary bond swaps that would write down Greek obligations by roughly 21 cents on the dollar. Markets now price those obligations at less than 50 cents on the dollar. Compelling creditors to acknowledge that reality would give Greece breathing room to promote growth.
If Europe’s leaders do not come up with a more robust plan, the judgment of global stock and credit markets is likely to be harsh and swift. Germany will be one of the biggest losers. It is time for Mrs. Merkel to acknowledge that truth — and do what is best for Germany and all of Europe.
GERMANY will be one of the biggest losers? How about US investment banks?
