A Great Achievement in Central Banking (II) | 120 comments (120 topical, 0 editorial, 0 hidden)

Re: A Great Achievement in Central Banking (II) (none / 1)

An op-ed in FTD (which also discusses Germany's higher-than-SPain's total debt and higher-than-Huungary's deficit) ends optimistic:

Bundesanleihen: Ein hoffentlich rechtzeitiger Schuss vor den Bug \| FTD.de		Federal bonds: A hopefully timely shot across the bow \| FTD.de
Kommentar Die schlechteste deutsche Anleiheemission seit der Einführung des Euro ist ein deutliches Signal nach Berlin, dass die Schuldenkrise nicht das Problem der anderen ist - sondern das der Deutschen. von Frank Bremser		Commentary The worst German bond issue since the introduction of the euro is a clear signal to Berlin that the debt crisis is not the problem of the others - but that of the Germans. By Frank Bremser
...Die Deutschen haben sich von den verräterisch niedrigen Renditen ihrer Anleihen blenden lassen. Ein dramatischer Fehler. Das hat dazu geführt, dass bislang echte Lösungsvorschläge für die Euro-Krise nicht aus Deutschland kamen. Die Franzosen fordern Eurobonds, einen stärkeren Euro-Rettungsfonds und ein Einschreiten der Europäischen Zentralbank. Verständlich, Ihnen steht das Wasser auch bis zum Hals. Was fordert Deutschland? Sparen und Vernunft. Naja, das kann man gut tun, wenn es einen selbst nicht betrifft.		... The Germans have alowed themselves to be blinded by treacherously low yields on their bonds. A dramatic mistake. This has led to the situation that no real solutions to the Euro Crisis came from Germany yet. The French call for Euro bonds, a stronger Euro rescue fund and intervention by the European Central Bank. That's understandable, the water is up to their neck. What is Germany calling for? Saving and rationality. Well, that one can do well if it doesn't concern oneself.
Es geht gar nicht um die Frage, ob sich Angela Merkel und Nicoals Sarkozy händchenhaltend wie einst Helmut Kohl und Francois Mitterand vor die Presse stellen sollen und sagen: "Die Rechnung geht komplett auf uns." Es geht auch nicht darum, ob es Eurobonds geben muss oder nicht. Es geht darum, dass die Schuldenkrise der Euro-Zone nicht das Problem einiger weniger Außenseiter ist, sondern das Problem aller. Vielleicht hat Deutschland das nach der missglückten Anleiheemission verstanden.		The issue is not the question whether Angela Merkel and Nicolas Sarkozy should stand before the press holding hands as Helmut Kohl and Francois Mitterrand once did and say: "The bill is completely on us." It's also not about whether there needs to be Euro bonds or not. The point is that the debt crisis of the Eurozone is not the problem of a few outsiders, but the problem of all. Maybe Germany has understood after the unsuccessful bond issue.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Nov 24th, 2011 at 05:13:52 AM EST

Re: A Great Achievement in Central Banking (II) (none / 1)

The reason for that optimism may be this:

Schuldenkrise: Front gegen Eurobonds bröckelt \| FTD.de		Debt crisis: The Front Against Euro-bonds is crumbling \| FTD.de
Die Gemeinschaftsanleihen werden wahrscheinlicher: In der Koalition mehren sich die Stimmen für die Eurobonds. Die Kanzlerin könnte Offenheit beim EU-Gipfel signalisieren, heißt es aus Union und FDP. Zum ersten Mal äußert sich zudem auch die EZB positiv.		The joint bonds are becoming more likely: in the [federal German governing] coalition, voices for the Euro bonds are multiplying. The Chancellor may signal openness at the EU summit, say some from the CDU and FDP. For the first time, the ECB also expressed itself positively.

The details are less savoury, though: the CDU guys are still thinking in terms of a bargain with the treaty change as price.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Nov 24th, 2011 at 05:20:13 AM EST
[ Parent ]

Re: A Great Achievement in Central Banking (II) (none / 0)

According to Münchau, that's all for next crisis, not for the current one.

(In our view, the European Council should consider bringing forward the date of the December 9 summit, and adopt proposals for a Treaty Reform for a fiscal union and Eurobonds right away. Without this, there will be no crisis resolution. At this rate of market panic, it is not clear that the eurozone will otherwise make it until December 9.)

(Eurointelligence)

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 24th, 2011 at 05:55:40 AM EST
[ Parent ]

Re: A Great Achievement in Central Banking (II) (none / 0)

I can't access the link, so can't tell if the quoted part is from Münchau or quoted by him from someone else. If the former, then he is speaking of Eurobonds as well as fiscal union as solution to the current crisis. Earlier it has been argued by many though that treaty changes take years and thus can indeed only address the next crisis rather than the current one. So again Martin Schulz in today's taz, though his quick solution Eurobonds supported by individual member states separately, solves nothing if I remember correctly.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Nov 24th, 2011 at 06:30:40 AM EST
[ Parent ]

Re: A Great Achievement in Central Banking (II) (none / 0)

Paragraphs in parentheses in the middle of Eurointelligence's press reviews are editorial comments (presumably by Münchau).

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 24th, 2011 at 06:37:14 AM EST
[ Parent ]

Re: A Great Achievement in Central Banking (II) (none / 1)

A pro austerity comment.

And that is quite dishonest:

"Das Haushaltsdefizit betrug 4,3 Prozent, das ist im europäischen Vergleich noch recht gut, aber zum Beispiel Dänemark oder Ungarn wirtschafteten 2010 besser. "

Pointing out that the deficit in 2010 was 4,3% of gdp and that Denmark or Hungary were "better".

Of course the deficit in 2010 was actually higher then 2009. Why? Because the crisis of 2009 and the stimulus to fight the crisis arrived 2010 in the public budgets in the year 2010. A deficit two years ago during a shrinking of the economy of 5% is not high.

by IM on Thu Nov 24th, 2011 at 07:16:15 AM EST
[ Parent ]

Re: A Great Achievement in Central Banking (II) (none / 0)

Is this a good time for the PIIGS and other "periphery countries," like Hungary, to tell Merkozy to either come back to sanity or they will play the default card?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Nov 25th, 2011 at 06:06:00 AM EST
[ Parent ]

Re: A Great Achievement in Central Banking (II) (4.00 / 4)

Hungary is not in the Eurozone and has a mad right-wing government.
If just one of the PIIGS leaders had the acumen to think outside the box and rebel against the austerity dictate, Merkozy would have nothing to say years ago already.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Fri Nov 25th, 2011 at 07:32:42 AM EST
[ Parent ]

Re: A Great Achievement in Central Banking (II) (none / 1)

Hungary isn't in the eurozone but the forint, thus the Hungarian economy, is being jerked around by the ECB's euro policies.

In fact:

The forint weakened 1.5 percent today and traded at 316.11 per euro at 7:15 p.m. in Budapest. It lost 16 percent since June 30, making it the worst-performing currency in the world. The government's 10-year bonds slid, lifting the yield above 9 percent for the first time since 2009. Credit-default swaps rose to 646 basis points, a record high.

& etc. and so - depressingly - so forth.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Nov 25th, 2011 at 03:31:09 PM EST
[ Parent ]

A Great Achievement in Central Banking (II) | 120 comments (120 topical, 0 editorial, 0 hidden)

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