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Angela Merkel issued a characteristically unhelpful non-denial denial

Checking, I find it was a reply to a question explicitly asking whether the EU is prepared for the case of emergency.

REGIERUNGonline - Pressestatements von Bundeskanzlerin Angela Merkel und dem französischen Präsidenten Nicolas SarkozyREGIERUNGonline - Press statements of German Federal Chancellor Angela Merkel and French President Nicolas Sarkozy
Frage: Guten Tag, Frau Bundeskanzlerin, zunächst einmal möchte ich von Ihnen einen Kommentar zu Spanien haben, das gesagt hat, dass es Probleme hat, sich im Ausland zu refinanzieren. Besteht hier ein europäischer Eingriffsplan, wenn das, was die Spanier machen, nicht ausreicht? Ich möchte wissen, ob Sie in den Gesprächen und den Vorschlägen, die Sie machen werden, die Restrukturierung eines Landes der Eurozone, das in Schwierigkeiten gerät, beabsichtigen...Question: Have a good day, Mrs. Federal Chancellor, first I want a commentary from you about Spain, which said that it has problems to refinance itself abroad. Does a European intervention plan exist on this, if what the Spanish are doing is not sufficient? I want to know whether you intend [to bring up] the restructuring of an Eurozone country which got into trouble in the talks and the proposals you will present...
BK´in Merkel: Bezüglich Spanien ist die wichtige Nachricht, dass wir einen Rettungsschirm für den gesamten Euroraum gespannt haben. Er ist jetzt in den wichtigen Ländern verabschiedet worden. Insofern ist das eine wichtige Botschaft an die Märkte.Federal Chancellor Merkel: Regardin Spain, the important message is that we have drawn a rescue umbrella over the whole Eurozone. It was now adopted in the important countries. In that it is an important message to the markets.
Wenn es Probleme geben sollte ‑ ich finde, wir sollten sie nicht herbeireden ‑, dann kann dieser Schirm jederzeit aktiviert werden. Die Konditionen sind klar. Insoweit brauchen wir wohl keine Sorge zu haben. Der Gegenstand unserer Treffen war, dass wir gesagt haben, wir brauchen einen solchen Schirm. Spanien ‑ oder welches Land auch immer ‑ weiß, dass es diesen Schirm in Anspruch nehmen kann, wenn es notwendig ist.Should there be problems - and I think we should not call it forth by talking about it -, this umbrella can be activated at any time. The conditions are clear. In that we do not have to be concerned. The subject of our meeting was that we said that we need such an umbrella. Spain - or whichever country - knows that it can access this umbrella, if it is necessary.
Wir alle haben ein Interesse daran, die Dinge nicht herbeizureden, die jetzt gerüchtemäßig da sind. Ich habe kein Interesse daran, dass es zum Schluss sich selbst erfüllende Prophezeiungen gibt. Deshalb beteilige ich mich jetzt nicht an Spekulationen.We all have an interest to not call things forth which are presently around as rumours by talking about them. I have no interest in there being self-fulfilling prophecies in the end. For that reason I won't participate in speculations now.

The finance ministry issued its own denial, which was more double-talk-ish: they denied that there is a crisis by saying that the rescue package criteria of insolvency and a danger to the stability of the Euro do not exist, Spain could sell on capital markets successfully, and Spain has its own national bank bailout fund as first line of defense; but that's no denial of the claim that Spain asked for help. Whatever is going on here the movers are highly irresponsible.

Is a country that would have government officials spread damaging rumours about a fellow Eurozone country "on condition of anonymity" the weekend before a major public debt issue fit to be a member of the Eurozone, especially when said country is the Eurozone's largest economy and its bonds are the benchmark for ther countries'?

Dumping Germany from the Eurozone might be a fitting punishment for the German government and banking sector (though a default would be a much better punishment), but that won't achieve anything for the rest. If the benchmark of German bonds is gone, interest rates would climb further; other Eurozone members weren't too high on solidarity either; and specifically Spain's indebtednesss to germany is rivalled by that to France.

At any rate, I will wait until there are explicit and public signs from the two governments before I believe that this ferocious "Spain-Germany Cold War" visioned in Anglo media is really on the horizon.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sun Jun 20th, 2010 at 12:14:10 PM EST
El Pais: Why does Berlin attack Spain? (20/06/2010)

See Google Translate version.

Can we stop it with this assumption that Europe's problems are a figment of the imagination of the English-language press? It's a poor excuse.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Sun Jun 20th, 2010 at 07:06:00 PM EST
[ Parent ]
Ah but the English-language press adds just the right amount of crunchy insanity.

But to the matter at hand: Why are we blaming Germany specifically? Is there anyone anywhere in power who has not yet declared austerity to be the height of both virtue and wisdom?

by generic on Mon Jun 21st, 2010 at 05:29:20 AM EST
[ Parent ]
Germany is the largest Euro economy, the one with the largest trade surplus, and the one the market takes as benchmark. This makes it the single most powerful country and the one with the largest responsibility for success/failure of European economic policies.

In this context:

  1. the constant flip-flopping on the Greek situation arguably made matters worse
  2. we now have credible claims of spreading market-sensitive misinformation

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Mon Jun 21st, 2010 at 05:45:37 AM EST
[ Parent ]
All of that is true. Nonetheless if the consensus is to burn down the house why bother complaining about somebody playing with fire?

I take the leaking as a sign of internal divisions more than anything else. It seems that Merkel managed to both rid herself of all possible rivals and demoralise her supporters. Some sniping is to be expected.

by generic on Mon Jun 21st, 2010 at 07:06:03 PM EST
[ Parent ]
That El País article only references the Reuters article. And there is a rather far and wide spectrum between 'ferocious Spain-Germany Cold War' (imagined by Anglo media) and all problems being imagined (which would be a superficial reading of what I wrote).

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Jun 21st, 2010 at 02:05:21 PM EST
[ Parent ]
That El País article only references the Reuters article.

Not quite. The most obvious difference is an quotation by Nicolas Veron from Bruegel but there's also a summary of El Pais' own reporting from the previous week as well as other information not contained in the Reuters article.

As for the general editorialising tone of El Pais' coverage, there are things like Terrible management at German banks (google translate)

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Mon Jun 21st, 2010 at 02:23:27 PM EST
[ Parent ]
What I mean is that in that article, only the Reuters article reference seemed to be evidence of actual Spain-Germany conflict cited. The rest seems to be a general analysis of the financial situation, with particular focus on risks in Germany (also discussing the German state banks, without mentioning that the current stress tests won't cover those), and without conclusions drawn (maybe except for the end, see below). On the other hand, if this and other articles in El País shall be considered the reaction of the Spanish government/elite/powers that be and in that a mirror of FAZ, then OK the low-level conflict may continue. Still, this appears even below the level of regular sniping between Merkel and Sarkozy and connected press leaks/spin.

:: :: :: :: ::

As for the end of that article, in Google translate:

...And yet, once again, Germany will have the last word. Merkel gave her support "transparency" involving the testing, but also warned that "details" (which eventually will be released), "the finance ministers decided in Ecofin." In other words, it depends on what his minister Wolfgang Schauble decree on 13 July.

If I read this right, El País is insinuating that Merkel is foreshadowing that Schäuble will water down the transparency in a month. If that's the right reading, then I suspected a misinterpretation already from having read articles on the stress tests two days ago that criticised the EC for not fixing details, so I tried to track this down.

REGIERUNGonline - Pressekonferenz von Bundeskanzlerin Angela Merkel zur Sitzung des Europäischen RatsGOVERNMENTonline - Press conference of Federal Chancellor Angela Merkel on the summit of the European Council
Frage: Frau Bundeskanzlerin, noch einmal zu den Stresstests: Können Sie uns sagen, wie groß der Kreis der Banken sein soll, die untersucht werden? Werden es mehr als die bisherigen sein? Sollen die Ergebnisse Bank für Bank veröffentlicht werden, wie das unter anderem Herr Barroso gefordert hat?Question: Mrs. Federal Chancellor, again about the stress tests: could you tell us, how wide shall be the circle of banks that shall be tested? Will it be more than previously? Should the results be published individually for each bank, as demanded by Mr. Barroso among others?
BK'in Merkel: Es gab heute die Übereinstimmung zu größtmöglicher Transparenz. Ich glaube, die Details werden dann die Finanzminister festlegen. Es war uns allen jedenfalls klar, dass das im Sinne der gleichen Wettbewerbsverhältnisse und des gleichen Felds, in dem man spielt, sozusagen kompatibel und möglichst transparent sein sollte. Die Einzelheiten werden, wie gesagt, später durch die Finanzminister festgelegt.Federal Chancellor Merkel: Today there was agreement about the greatest possible transparency. I believe the details will be fixed by the finance ministers [Ecofin]. At any rate, it was clear to all of us that, in the spirit of a level playing field for competition and the same field to play in, it should be, let's say compatible and as transparent as possible. The details will be, as I said, fixed later by the finance ministers ([Ecofin].

This is obviously an evasion of a question on specific details.

As for what Schäuble's ministry did on the stress test front after the EU summit: going beyond the "if you have nothing to hide..." argument (see this comment of mine), they look for ways to change German law that mandates the tested bank's approval for publication, and Schäuble gave an interview (to another business magazine, the interviewer of which is another automatically blaming Greeks and Spaniards for the situation) in which he insists that the risk of eventual bailouts in the wake of the publication is one to take, one for which the EU has funds ready, and claims that "we won't have to pay in the end"  [speak: any run on a bank would be stopped with temporary liquidity injections that are repaid after the bankruptcy is averted].

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Jun 22nd, 2010 at 02:25:02 PM EST
[ Parent ]
BTW, unless you want to cure low blood pressure, avoid FAZ's upping the ante: yesterday's inerview with economist and Barcelona resident Edward Hugh (whom we know from the blog A Few Euros More, I believe).

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Jun 22nd, 2010 at 02:28:31 PM EST
[ Parent ]


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