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Jerome a Paris: They'd rather "freely" pay larger amounts to lawyers, private insurance companies, oil companies or mercenaries than to the government.

No.  In this specific case, they simply would rather not pay extra taxes in order to save another country from the incompetence and/or corruption of its own government.  Has nothing to do with lawyers, private insurance companies, oil companies or mercenaries.

The point is not to be right, but to get to right.

by marco on Mon Apr 19th, 2010 at 11:37:13 AM EST
[ Parent ]
Well, the Germans didn't mind the Greek debt when they sold them several state-of-the art submarines...

"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Mon Apr 19th, 2010 at 12:41:07 PM EST
[ Parent ]
We're talking 3 year loans in this case, with a yield of 5.33%.

Munchau says this is a net transfer of wealth from Athens to Germany, a kind of loan payout dynamic that is quite familiar historically.

by Upstate NY on Mon Apr 19th, 2010 at 12:50:17 PM EST
[ Parent ]
That's ridiculous. Germany could extract 4% in seigniorage out of Greece. If the German government is unable to fund that without raising taxes...

Not to speak of the fact that they probably think they cannot do it without raising taxes partly because they wrote into the ECB regulations that the German government cannot borrow from the ECB. But of course, if Greece could borrow from the ECB we wouldn't be having this conversation.

Ultimately, this is all the fault of the Bundesbank's ideologues.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 01:41:51 AM EST
[ Parent ]
Like this one.

Bundesbank attacks Greek rescue as a threat to stability - Telegraph

The Bundesbank, headed by ultra-hawk Axel Weber, said the decision to bring in the IMF makes matters worse, arguing that the EU would impose tougher budgetary discipline.

The report mocked the IMF as the "Inflation Maximising Fund", saying the body had gone soft under Dominique Strauss-Kahn, a French socialist and Keynesian. It has shifted focus from fiscal cleansing to "growth-oriented" financial policies. "Currency reserves from the Bundesbank cannot plausibly be made available for such purposes," it said.

by generic on Tue Apr 20th, 2010 at 06:59:25 AM EST
[ Parent ]
Alex Weber is the front-runner to replace Trichet next year.

Or was. I cannot imagine that the rest of the Eurozone will take kindly to him spouting this kind of nonsense.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 07:06:48 AM EST
[ Parent ]
It's unfortunately hard to see Germany accepting anyone else...
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Apr 20th, 2010 at 07:30:37 AM EST
[ Parent ]
Then there will be an impasse.

As with other high-profile European appointments, if there is disagreement an outsider gets the job.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 07:34:26 AM EST
[ Parent ]
That is the only way out.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Apr 20th, 2010 at 07:37:03 AM EST
[ Parent ]
Axel Weber has a reputation as an inflation fighter. If Germany can't collectively muster enough neurons to realise Europe's problem right now is deflation...

The brainless should not be in banking -- Willem Buiter
by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 07:44:23 AM EST
[ Parent ]
Sorry, not Alex but Axel.

The brainless should not be in banking -- Willem Buiter
by Migeru (migeru at eurotrib dot com) on Tue Apr 20th, 2010 at 08:10:16 AM EST
[ Parent ]
sorry, I was writing about the WSJ writer who spouted that article and wrote about "no taxation without representation" and other similar inanities.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Tue Apr 20th, 2010 at 11:29:57 AM EST
[ Parent ]

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