EUOBSERVER / BRUSSELS - The emerging new leadership in Slovakia has said the country will not contribute its share of the €110 billion rescue package for Greece. In addition, Bratislava is likely not to add its signature to the €750 billion eurozone support mechanism - something that could put the entire project on ice.

BZZZZZZZZzzzzzzzzzzz!

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

... though we may well be in position to judge the coming, lasting effects.

I don't get a sense that there's anything political about this, even though I don't understand enough to even have a sense.  Seems far more likely that we're seeing the leaking version of what's happening behind the scenes, as we enter Phase Whatever of the Great Meltdown.

I suspect this is more about the strategies of Deutsche Bank, Siemens, Daimler, FauVay and the rest of the German financial/industrial powerhouse trying to make sense of what they already see coming, not that they would let us in on it.  I would expect the Bundesbank to be a tool of those in power, and suspect that this has little to do with government.

Or, certainly not a government that has any inclination to be about the lives of normal people.

I would sense this is more about Santander et. al. putting Ackermann et. al. up against a wall, and the old guard reacting (knowing full well their own weakness with respect to solvency.)  i sense masters of the universe are using old-world tactics, all they know, to fight for position. They certainly know the reality, or else banks would still be lending to each other.

But then, me know nothing, actually, especially with regard to the flaying of the dying dinosaurs as the world melts.  What i do know, not really, is that it's likely to get worser before it gets besserer.

Skennah Kowa

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

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.

*Traitor*, n.
A benighted individual who perceives an illusory distinction between serving his nation and abetting the criminals who govern it.

WW2-associations are usually taboo in the European debate, especially when Germany is involved, which means some people are really fucking angry with Berlin. And that's not strange. What the fuck are they up to? It seems they are acting completely irrationaly excactly due to WW2-mind-trauma (inflation-> invade Poland).

In the words of Krugman:

German hawk: "We must cut deficits immediately, because we have to deal with the fiscal burden of an aging population."

Ugly American: "But that doesn't make sense. Even if you manage to save 80 billion euros -- which you won't, because the budget cuts will hurt your economy and reduce revenues -- the interest payments on that much debt would be less than a tenth of a percent of your G.D.P. So the austerity you're pursuing will threaten economic recovery while doing next to nothing to improve your long-run budget position."

German hawk: "I won't try to argue the arithmetic. You have to take into account the market reaction."

Ugly American: "But how do you know how the market will react? And anyway, why should the market be moved by policies that have almost no impact on the long-run fiscal position?"

German hawk: "You just don't understand our situation."

Invertia.com - Deutsche Bank se descubre: apuesta 600 millones contra BBVA y Banco Popular		Invertia.com - Deutsche Bank drops its cover: it bets €600m against BBVA and Banco Popular
Hugo Banziger, jefe de riesgos de Deutsche Bank, estuvo el día 10 de junio en Madrid en una conferencia organizada por Goldman Sachs, uno de los bancos de inversión más influyentes del mundo. En ese marco, la entidad germana confesó que ha apostado más de 1.000 millones de euros contra deuda corporativa española (credit corporate). A esa cifra se le unen otros 800 millones contra Portugal.		Hugo Banziger, head of risk at Deutsche Bank, was in Madrid on june 10 at a conference organised by Goldman Sachs, one of the world's most influential investment banks. In that venue, the German bank confessed it has bet over €1bn against Spanish corporate debt. To this figure one must add €800m against Portugal.
Fuentes consultadas por este portal explican que una de las formas en las que Deutsche puede ponerse corto en credit corporate español es a través de CDS (credit default swap), derivado que actúa como seguro contra el impago de una deuda. Desde un banco comentan que puede tratarse también de GGB (Government Guarantied Bonds), o sea, "deuda con aval español". En cualquier caso, sea de la forma que sea, lo que subyace es la visión negativa del banco alemán sobre la economía española.		Sources consulted by this portal explain that one of the ways that Deutsche can be short Spain's corporate credit is through CDS, a derivative acting as insurance against default on debt. From a bank they comment that [the debt in question] could be Government Guaranteed Bonds. In any case, in whatever way, underlying this is a negative vision of the Spanish economy by the German bank.
La mayor entidad financiera del país teutón justifica esta expresiva declaración de intenciones como una estrategia para defenderse de los movimientos en la valoración de los créditos (value of the credits), recoge el diario The Telegraph. En esta reunión, Deutsche aseguró que no tiene ni un solo bono español o portugués, mientras que en Italia mantiene una cartera de 3.100 millones de euros a cierre de marzo.		The largest financial entity in German justifies this expressive declaration of intentions as a strategy to hedge against movements in the value of credit, according to The Telegraph. At this meeting, Deutsche claimed that it doesn't hold a single Spanish or Portuguese bond, while in Italy they kept a portfolio of €3.1bn at the end of March.
...		...
Esta agresiva estrategia de Deutsche Bank contra la Península Ibérica se completa con millonarias posiciones bajistas en BBVA y Popular, segundo y tercer banco español por activos, respectivamente. En marzo de este año, Ackermann advirtió de que la quiebra de Grecia tendría efectos dramáticos en la industria financiera. Toda una declaración de intenciones de la que ahora intenta sacar partido.		This aggresive strategy by Deutsche Bank against the Iberian Peninsula is completed with bearish positions worth millions in BBVA and Popular, second and third Spanish banks by assets, respectively. In march of this year, Ackermann warned that the bankruptcy of Greece would have dramatic effects on the financial industry. A declaration of intentions that he intends to profit from now.

So Germany introduces a unilateral short ban which now protects Deutsche Bank while DB takes a 600 million Euro short position in Spanish banks as well as CDS positions against Spanish debt to which they have no actual exposure. Ho hum.

About Germany's short ban: too bad Deutsche Bank is cross-listed at US stock exchanges...

Also, isn't it interesting that DB claims to have unwound any exposure they had to all the PIIGS except to Italy, which explains why 1) it's not PIIGS any longer, just PIGS; 2) Italy received a helpful hand from Germany, France and Belgium to avoid sanctions over excessive debt at the last EU council summit.

Is it a coincidence that Spain, Portugal and Greece have PES governments while Belgium, France, Italy and  Germany have EPP governments?

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

So WWII is a no-no subject??  How odd.  Hope they invade England and do it right this time.  You have my permission to get rid of BP.

I love the smell of roast chicken in the morning!

Germany "is the main protagonist" in the euro's crisis and risks inflicting deflation on the European Union because of its insistence on budget austerity, billionaire investor George Soros said.

"As the strongest and most creditworthy country it is in the driver's seat," Soros said in a speech at Humboldt University in Berlin yesterday. "As a result Germany objectively determines the financial and macroeconomic policies of the euro zone without being subjectively aware of it. When all the member countries try to be like Germany they are bound to send the euro zone into a deflationary spiral."

Somehow I lost the labels, destroying the whole point of the post. The blue line is Germany; the red line is Spain.