“The euro is irreversible,” said ECB President Mario Draghi as a whiff of panic began sweeping over the Eurozone. Everybody was supposed to enjoy their long vacation, and nothing important was supposed to happen. But, like a group of disruptive homeless guys, the ECB, the International Monetary Fund, and politicians have apparently gotten tired of kicking the Greek bailout can down the road, and they stomped on it instead.
Europe – Germany
“Southern Europe Does Almost Nothing—Except Complain”
by Wolf Richter • • 4 Comments
Bulgaria, which has a balanced budget, a growing economy, and a top income tax rate of 10%, fires a withering blast at neighboring Greece where the new government, instead of implementing structural reforms, invokes bankruptcy unless it gets more money. And in Spain, which is teetering on economic collapse, protests erupted in the streets as people resist reforms. So, Bulgaria put joining the euro on ice
Even Counterfeiters Are Giving Up On The Euro
by Wolf Richter • • 7 Comments
My first experience with euros was mid-December 2001 when I travelled to Germany. Bank showcases were filled with euro feel-good agitprop. Euro bills and coins would enter circulation soon, and this was part of the campaign to persuade Germans to surrender their marks. People had apprehensions, but my business contacts were gleeful: the euro would become the dominant reserve currency in the world; oil would be priced in it.
Euro Desperation: German Justices Already Buckled Under Political Pressure
by Wolf Richter • • Comments Off on Euro Desperation: German Justices Already Buckled Under Political Pressure
Jean-Claude Juncker was desperate. The Prime Minister of Luxemburg and President of the Eurogroup is the ultimate Eurozone infighter. “We all know what to do, but we don’t know how to get re-elected afterwards,” he’d once said—now referred to as “Juncker’s curse.” But he, the longest-serving head of state in the EU, knows how to get reelected. So when he is desperate, even the German Constitutional Court listens.
Troika Inspectors Paint “Awful Picture” of Greece, Merkel Draws A Line, German Industry and Voters Back Her: It’s Almost Over For Greece
by Wolf Richter • • Comments Off on Troika Inspectors Paint “Awful Picture” of Greece, Merkel Draws A Line, German Industry and Voters Back Her: It’s Almost Over For Greece
The new Greek finance minister, Yannis Stournaras, until recently a professor of economics at the University of Athens, hasn’t learned yet the art of extortion that is required to accomplish anything at all during bailout negotiations. And so, at the meeting of Eurozone finance ministers earlier this week, he accomplished absolutely nothing. He wasn’t even able, unlike his predecessors, to get himself into the media with some wild threat about a “disorderly default” or destroying the entire Eurozone.
Will the Euro Survive This Year?
by Wolf Richter • • 4 Comments
The European Stability Mechanism and the fiscal union pact are the two ploys that were supposed to fix the Eurozone debt crisis and save the euro. They were put together in all haste after hectic summits with dog and pony shows designed to soothe edgy markets. Negotiations involved mud-wrestling and extortion. It’s been one heck of a ride. But now they’re in the hands of the German Constitutional Court – and there are no good options.
The German Constitutional Court Rules Against Euro Hysteria
by Wolf Richter • • Comments Off on The German Constitutional Court Rules Against Euro Hysteria
Chancellor Angela Merkel did the right thing. She left Germany. And Germany is in turmoil. The bailout policies she and her government had pushed through and that parliament had passed just after the EU summit ran into discord, accusations, and threats. Everybody was applying pressure. And the Federal Constitutional Court will now have to decide—and it already made its first decision.
France, Germany, And The Reintroduction of the D-Mark
by Wolf Richter • • 5 Comments
Germany and France exist in two different universes, apparently: France, safely ensconced in a Eurozone without bailouts and with nary a debt crisis on the horizon, debates its economic and social model. Germany sees a Eurozone ravaged by a debt crisis with mind-boggling bailout costs and risks that stir up a furor on all sides, and everything is getting questioned, even the euro itself.
The Euro Crash Refuses To Go On Vacation
by Wolf Richter • • 1 Comment
Finnish Finance Minister Jutta Urpilainen set the scene for the long European summer break when she declared that Finland was a dedicated member of the Eurozone, eager to solve the crisis, but “not at any price”; it wouldn’t agree to take on “collective responsibility for debts and risks of other countries” via a banking union. And if push came to shove: “We are prepared for all scenarios, including abandoning the Euro.”
The “European Monster State”
by Wolf Richter • • Comments Off on The “European Monster State”
Rather than solving the Eurozone debt crisis once and for all, the EU summit gummed up the bailout process with controversy in the very country that everyone is counting on to save the Eurozone, Germany—but also elsewhere—and nothing has been resolved. And as before, there’s Greece, inexorably tottering towards its more or less graceful exit from the Eurozone as… “The patience of the public has been exhausted.”