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Germany: the Eurozone's fifth column | 67 comments (67 topical, editorial, 0 hidden)
Re: Germany: the Eurozone's fifth column (4.00 / 8)
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

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Germany: the Eurozone's fifth column | 67 comments (67 topical, 0 editorial, 0 hidden)
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