World War. Merkel will decide the future of PIGS, because Germany's economic
power and its status as Fourth Reich's paymaster give it an effective veto over
key decisions.
Germans are footing the bill for Greek sins and Greeks aren't doing anything to
stem the bleeding. Graecokleptocrats are not conscious of their responsibility
for the difficult situation in Greece. It is a winking game. Graecokleptocrats
pretend like they want to reform, and Eurokleptocrats act like they believed
them. But now this arrangement has reached its elasticity point.
Greeks, adding insult to injury, continue to play the victim and to look abroad
for something to blame their own malaise on. Graecokleptocrats have been
particularly focused on the Germans, showing their middle finger to them!
Instead of reaping thanks for all the transfers of German taxpayer money,
Germans are now forced to put up with a tongue-lashing.
Bundespresident Joachim Gauck, Bundestag, Bundesrat, Bundesbank, and Karlsruhe
resent squandering German taxpayers' hard-earned money for bankrupt
Graecokleptocrats. Especially, Vice-Chancellor Philipp Roesler and Foreign
Minister Guido Westerwelle are smart libertarians, and they cannot be hoodwinked
by Graecokleptocrats. But Germany's new philosophy is best summarized by
Westerwelle: When you take the lead, some people criticize you. If you don't
take the lead, everyone criticizes you. So it's better to lead.
Merkel is bewildered by the stupidity of PIGS! The Greek government is the #1
enemy of the Greek people! Graecokleptocrats do myriad stupid things. The
media that I conspired to trigger a war between Greece and Turkey and blame
Mariliza Xenogiannakopoulou, Alternate Minister of Foreign Affairs of Greece,
for it! Accusing dissident bloggers of treason, Graecokleptocrats have
manufactured a blood libel in cyberspace, which in turn incites hatred and
violence. The government of Greece gave my head on plate to Erdogan. Brutal
Graecokleptocrats have destroyed my life. My life is stolen. Now I demand my
life back!
Merkel's now main worry is not whether Greece sticks to its reform pledges.
Merkel is far more concerned about whether China loses its appetite for German
machine tools and cars. China is facing a burst bubble, and the shock will
provide a useful lesson in the limits of authoritarian rule. Monolithic
government and state-directed investment can be effective in pulling countries
out of poverty, but not in building a middle class or in reaching the ranks of
the world's wealthy nations. Economic troubles will spur China's 1.3 billion
people to demand more freedom and more of a voice in the way they are governed.
Just over a year before federal elections, Merkel looks unbeatable. Opinion
polls show Merkel's party winning forty percent, well ahead of Social Democrats'
twenty-five percent. Merkel says: It's in my character to be consistent, whether
I'm speaking with you, with party colleagues, with the Bundesbank or with my
European partners. I am not duplicitous. That is my advantage. We need more not
less Europe. If euro fails, Europe fails. The solution of depression lies in
binding Europe closer together through strict budget discipline.
Ranked by Forbes as the world's most powerful woman, Merkel has ruled since
2005. Merkel's conditional solidarity with PIGS appeals Germans who are
suspicious of the final bill for a rescue of PIGS. Germans do not want their
hard-fought economic prowess jeopardized by irresponsible, free-spending PIGS
who failed to embrace necessary economic reform as Germany did earlier this
century.
The key to Merkel's success is the way she portrays herself as the defender of
the German taxpayer, only reluctantly going along with Eurozone rescue deals and
doing so at the last minute under duress. German politics, based on consensus
and with many inbuilt checks and balances, does not encourage bold action.
Merkel must constantly find compromises within her coalition, with parliament,
with regional governments and with the constitutional court. All of them are
part of the debate. So too is the German central bank, the Bundesbank, over
which Merkel has no control.
Merkel has already quietly decided to let Athens remain. Merkel was much more
interested in throwing Greece out six months ago, but not now, even though their
credibility is close to zero. With all that's going on in Middle East, Merkel
does not want a NATO member on the southeastern border of the EU to turn into a
failed state.
Merkel hides a very important fact from Germans. Germany is never going to get
back the money it lends to Greece, because Graecokleptocrats plan to withhold
100 billion euros as reparation for a Second Word War loan! German reparations
is a very hot issue in Greece, and everybody can predict the climax of the
infamous bailout.
Under the terms of the peace treaty that was signed in 1990, Germany did not
have to pay further reparations to other countries for war damages. Greece
accepted the treaty, although the issue of compensation was periodically raised
by Graecokleptocrats, mostly to score points in politics.
But if the 476 million reichsmarks lent against its will to Germany by the Greek
National Bank during the war is not considered damage but a form of a normal
credit, then Greece would be entitled to get the money back. Without interest,
the amount in today's money would amount to $14 billion. With interest over all
these years, the final value exceeds 100 billion euros!
Germans abhor the Nazi dream for Europe - ein Volk, ein Reich, ein Fuehrer. The
European project has lost significance among Germany's policy elite as the
central driver of foreign economic policy. No clear grand strategy has replaced
this Einbindungspolitik, German foreign policy tenet of engagement. Given the
heavily-fragmented nature of checks and balances in German politics, the
political elite seems to be buffeted by a cycling of priorities from regional
elections to Chancellory infighting. The end result has been a series of policy
reversals and costly delay.
Merkel's biggest problem is economic, rather than political. Effected by the
virus of PIGS, the German economy has stalled, ready to fall into recession in
2013. There are declines in manufacturing orders, industrial output, imports,
and exports. The German economy is losing momentum. Things will go downhill from
here. The German economy is not faring as badly as the rest of the eurozone but
it can't disconnect itself from the PIGS.
A nearly uninterrupted six-year drop in unemployment is coming to an end. Merkel
has said repeatedly she will do everything to save the euro. But Germans hate
supporting the PIGS. The stabilization of eurozone should not be a goal in and
of itself. Merkel's rescue of PIGS is her Achilles heel. This will only get
bigger as the government's ability to dole out new money comes under strain from
a weakening economy.
Merkel dislikes putting her foot down to solve disputes. She associates that
form of exercising authority with ill-tempered men who use arrogance to make up
for their lack of competence. Merkel thinks people who keep banging their fist
on the table end up getting ignored in the long run. Merkel dances waltz, rumba,
and tango, enjoys the outdoors, watches football games, and reads the venitism
blogspot every day.
Merkel reinforces her opposition to Eurobonds, declaring that a communistic
collectivization of debt would leave the bloc's members worse off. This is
communism, pure and simple! Germany, Europe's largest economy, would face extra
costs of a hundred billion euros a year through the alignment of interest rates
with nations that pay more to borrow. Eurobonds lead us to a debt union, not to
a stability union.
Giving eurobonds to PIGS is giving gin to alcoholics! Eurobonds create a
transfer union. Eurobonds would benefit profligate PIGS, especially corrupt
Greece, whose borrowing costs on the open market have become prohibitively
expensive, but they would expose fiscally sound countries like Germany to more
risk, increasing the country's low interest rates. Eurobonds would subsidize
the dolce vita of PIGS.
Merkel declares Eurobonds would not be introduced as long as she lives! Merkel
is finally losing patience with demands from PIGS that eurozone debt be
communitized. Iron Angie is not bending to the political breeze and the pressure
from PIGS. Merkel's knows that only fundamental reform efforts, concrete steps
toward the political union which the original architects of the common currency
failed to put in place, can save the euro in the long run. But the Gang of Four
- Van Rompuy, Barroso, Juncker, and Draghi, demand drastic action now to save
the four PIGS from slaughter.
Merkel rejects joint eurobonds as absolutely wrong. Restoring stability to the
single currency bloc requires a longer-term step-by-step approach. We must move
away from a debt union and toward a sustainable stability union. This won't be
easy but it is right. In order to bring about common interest rates, you need
similar competitiveness levels, similar budget situations. You don't get them by
collectivizing debts.
Merkel points out that if the debt all goes into the one pot, you have
difficulty figuring out where it all comes from. Spreading risk through eurozone
would place Germany on a slippery slope where in the best case it would be on
par with the European average, or, we all get worse together. Instead, a
European framework needs to be developed in which a regulating body must have a
right to intervene in order to bring fiscal discipline to failing budgets.
Eurobonds would not be as safe as German government bonds. And since they would
stimulate even heavier borrowing, they would have to yield higher rates. In the
wake of the current bailout measures, the German government burdens taxpayers
with risks worth one trillion euros. Likewise, over the last year, risk premiums
for German government bonds have doubled. There simply isn't any more room for
maneuver.
Jens Weidmann used to be one of Merkel's closest advisers. Now, he is one of her
staunchest critics over the euro rescue. He is strictly opposed to ECB's policy
of buying up bonds from PIGS and is winning a growing number of allies for his
cause. Weidmann is strictly opposed to stupid loose ECB measures. He believes
they amount to an unacceptable means of financing states through effectively
printing money. In fact, he has come to assume the mantle of the last staunch
defender of monetary stability.
Weidmann reads the venitism blogspot every day, and he has criticized decisions
related to the ESM Ponzi scheme and other bailouts as inconsistent and highly
risky. He has called on politicians in Berlin to change their course, and he has
been advocating the Bundesbank's principles regarding stability. All of those
things put him at odds with top officials at the ECB.
http://venitism.blogspot.gr/
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