For German Chancellor Angela Merkel and her ilk, it’s going to be a steamy August and an even steamier September and October with political battles left and right, to be fought mano a mano, as the Eurozone debt crisis and the growing bailout rebellion in Germany are migrating from parliamentary discussions, closed-door meetings, and shaky EU summits—21 of them so far—to electoral politics. Voters may finally have a say. And it doesn’t look good for the euro.
Euro
The Political Euro Revolt Spreads To Austria: “Europe Can Only Function If Every Country Has Its Own Currency”
by Wolf Richter • • 1 Comment
Germany and Austria may have their differences, and their love for each other may not always be palpable, but when it comes to money, they’re joined at the hip. And have been for decades. The peg of the Austrian schilling to the Deutsche mark that was put in place in the early 1970s survived even external shocks, for example when Italy devalued the lira on January 6, 1990, or again on September 14, 1992. Now the euro debate took on sharp tones in Austria. With a new theme: “Insolvency Procrastination.”
Is The Greek Calamity Economy Headed For Revolt?
by Wolf Richter • • Comments Off on Is The Greek Calamity Economy Headed For Revolt?
“Dire” is no longer the right word to describe the situation in Greece. Unemployment hit 23.1% in May, according to ELSTAT, the Greek statistical agency, which released the report on August 9. That it takes over two months to do a job—producing unemployment numbers—that other countries accomplish in a couple of weeks may be symptomatic of Greece’s calamity economy. And a calamity it is.
Greece Prints Euros To Stay Afloat, The ECB Approves, The Bundesbank Nods, No One Wants To Get Blamed For Kicking Greece Out
by Wolf Richter • • 7 Comments
A lot of politicians in Germany and elsewhere issue zingers about a Greek exit from the Eurozone. Yet those with decision-making power play for time. They want someone else to do the job. Suddenly Greece is out of money again. Default date: August 20. A €3.2 billion bond matures. Europe is on vacation. It will be mayhem. And somebody will get blamed. But there’s one solution….
Top Euro Honcho Juncker: “Europeans are dwarfs”
by Wolf Richter • • 5 Comments
At first, Jean-Claude Juncker was just jabbering about Greece. No, he couldn’t categorically exclude its exit from the Eurozone, but it wouldn’t happen “before the end of autumn.” These words might have thrown the markets into vertigo-inducing tailspins a year ago. But now, the President of the Eurogroup wasn’t ruffling any feathers; and markets went up. That’s how far the debt crisis has advanced. But suddenly the dark floodgates opened, and deep pessimism flooded the airwaves.
The German Economy Caves, And Eurozone Bailouts Take On New Dimensions
by Wolf Richter • • 1 Comment
Last year, German exports rode to a new record, jobs were being created in massive numbers, real wages rose, housing and real estate boomed, the federal budget was nearly balanced, and consumers felt good and spent money. There were moments in 2012 that made people dream of a repeat performance—despite the havoc that the Eurozone debt crisis has been wreaking. But now, the German export machinery is shifting down with an ear-piercing screech.
Escalation of the Extortion Racket: Now It’s ‘The Dissolution Of Europe’ Not Just the Eurozone
by Wolf Richter • • Comments Off on Escalation of the Extortion Racket: Now It’s ‘The Dissolution Of Europe’ Not Just the Eurozone
It has been an onslaught. Eurozone heads of state, top politicians, unelected kingpins, and bureaucratic honchos threatened everyone in sight with the demise of the euro, or promised to do “everything” or “whatever it takes” to save it even if it violated treaties or the foundation of democracy. In between the lines, the mammoth costs of continuing the bailouts or of breaking everything up oozed to the surface. But it got even worse.
No Functional Miracle Weapons To Fight The Debt Crisis
by Wolf Richter • • 2 Comments
It must be infuriating for Mario Draghi, the hapless President of the European Central Bank, to see how masterfully the Fed and the Bank of Japan control their respective credit markets, how they manipulate them for the benefit of the banks, and how they’re allowing their governments to fund huge deficits at near zero cost. Draghi just doesn’t seem to be able to wrap his arms around it.
Is Germany Preparing for a Spanish Default?
by Wolf Richter • • 10 Comments
Hope persists that Germany would not only bail out Spain and the rest of the Eurozone but would also tolerate the Fed-ization of the European Central Bank. Even Treasury Secretary Tim Geithner was hounding German Finance Minister Wolfgang Schäuble, who was on vacation. Yet, Deutsche Bank, Germany’s de-facto vice-ministry of finance whose CEO serves as éminence grise behind elected officials, well, that venerable institution at the core of Germany Inc. appears to be closing the book on Spain.
War Of The Central Banks?
by Wolf Richter • • 2 Comments
The coordinated confidence-inspiring words from the Eurozone’s fearless leaders yesterday and today about doing whatever it would take to save the euro wasn’t about Greece anymore. Politicians have apparently given up on it. Instead, the fearless leaders were afraid of Spain. Its vital signs were deteriorating. It had threatened with default. So the ECB caved. And in doing so, it threw down the gauntlet.