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arguing like Merkel is some kind of dictator, assuming she is not just one out of 27 head of governments but the only one

Over the past 18 months, increasingly Merkel and Sarkozy have been dictating EU Council policy, and organizing a string of bilateral summits (starting with Deauville last Autumn) where the next step in EU policy is announced to the world (and the Council).

In the case of the July market crisis, when it first flared up Sarkozy wanted to organize a summit to discuss Spain and Italy (yes, Italy is under Market attack and has been for nearly 2 months, at least as far as Sarko is concerned) and Merkel first 1) said she wouldn't attend because there was nothing to discuss; 2) hid behind Greece (she said she wouldn't even attend a second summit a week later unless a deal for Greece had been hammered out by then; 3) then ensured that the 21 July summit discussed nothing but Greece so it had to wait until the market meltdown of August 5 before Merkel and Wiedmann agreed to even acknowledge that the market was now attacking Spain and Italy and that the EFSF was dead in the water.

I said in mid-July that the Council should have called Merkel's bluff and met without her...

But whatever.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 05:53:39 AM EST
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HOW DARE YOU ACCUSE MERKEL OF BEING HITLER!?!?!? YOU'RE JUST LIKE STALIN!!!!
by Colman (colman at eurotrib.com) on Thu Sep 8th, 2011 at 05:55:51 AM EST
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Oh come on. I just said that this kind of rhetoric is obscuring rather then illuminating.

Or do you actually think Sarkozy is some sort of Quisling?

by IM on Thu Sep 8th, 2011 at 06:08:18 AM EST
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No, I just think he's the conductor on the right-wing Conventional Wisdom bus that Merkel is driving. The passengers could get off, but they're too chicken-shit to do so or they basically agree with the driver's choice of route.
by Colman (colman at eurotrib.com) on Thu Sep 8th, 2011 at 06:10:36 AM EST
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"or they basically agree with the driver's choice of route."

That is my point. Most european countreis are governed by right-wingers, they enact right-wing policies. That is all.

Or do you think a different german government could all of its own force the EU in another direction?

by IM on Thu Sep 8th, 2011 at 06:26:42 AM EST
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I asked you about the SPD supporting the 2009 debt brake amendment and you said "so what?"

This diary is about the PSOE panicking and adopting the PP's proposal (from 2010) to do the same, to general shock among the Spanish left public opinion.

So what? Do you think the Party of European Socialists provides a credible alternative? Do you think the SPD is not responsible for enabling the 2-year drive to EU wide constitutional debt brakes?

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 06:30:59 AM EST
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Now not only the government, but the opposition in Germany is all powerful? Impressive.

By the way I already told what the opposition in Germany wants Eurobonds - transaction tax - Marschall plan financed by said transaction tax.

But you didn't listen. As usual

by IM on Thu Sep 8th, 2011 at 12:47:02 PM EST
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For the umpteenth time: the German opposition could have stopped this nonsense in 2009 but they didn't.

That's not being all powerful, it's being stupid.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 01:12:43 PM EST
[ Parent ]
By the way I already told what the opposition in Germany wants Eurobonds - transaction tax - Marschall plan financed by said transaction tax.

In the first place, if you can fund a Marshall plan type of project with a transaction tax, then your transaction tax isn't high enough. Because the whole point of a financial transaction tax is to kill the noise traders stone cold dead. Which, if it works as desired, also kills the base for that tax stone cold dead.

In the second place, even if they design a financial transaction tax to extract the maximum possible receipts, rather than impose the maximum possible harassment on noise traders consistent with not harassing productive businesses, revenues will not suffice to fund a Eurobancor. Even in the most optimistic possible estimate (where the Eurozone financial sector is assumed to contribute roughly half of the £ 250 bn that the Robin Hood Tax people guesstimate could be raised globally), it will fall short of plugging even the German CA imbalance (currently around $ 180 bn), to say nothing of the aggregate imbalances.

So while a Tobin tax is an excellent idea that will solve a great many problems, the biggest problem is not one of them.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Sep 9th, 2011 at 10:13:44 AM EST
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In the first place, if you can fund a Marshall plan type of project with a transaction tax, then your transaction tax isn't high enough. Because the whole point of a financial transaction tax is to kill the noise traders stone cold dead. Which, if it works as desired, also kills the base for that tax stone cold dead.

ATTAC and others make the mistake of seeing the Tobin Tax as a revenue generating mechanism which was never Tobin's intention when proposing it...

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Sat Sep 10th, 2011 at 04:51:16 AM EST
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I don't know what Sarkozy is thinking. In May 2010 he reportedly threatened to quit the Euro right there and then if Merkel didn't play ball and managed to extract the creation of the (flawed) EFSF as a result. Since then, he's been soft like a kitten.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 06:14:06 AM EST
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I still don't think that any of them are thinking, exactly. They're fighting for their own political survival and their legal survival after they leave power. What are the odds that an unfriendly successor government couldn't find lots of grounds to prosecute a worm like Sarko?
by Colman (colman at eurotrib.com) on Thu Sep 8th, 2011 at 06:15:19 AM EST
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That is another thing I try to explain from time to time. The current german government isn't strong, but rather quite weak. And weak governments tend to plan from day to day, in other words not at all. They don't really think about other european countries, they think about the next state election.

So I tend to protest if I read analyses of the sort, Germany is planning this and wanting that. The current isn't planing and wanting mostly negative things, like to be left alone or to kick the can down the road so that they can concentrate on the coalition crisis.

Not that policy by drift can't be harmful.

by IM on Thu Sep 8th, 2011 at 06:32:51 AM EST
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And I think this is an important reason why many Europeans, especially on the left, currently identify "German policies", or even (shudder) "Germany", as the villains in the current crisis, rather than blaming Merkel and Sarkozy, for example.

Bear with me for a minute : Merkel, who visibly doesn't have any ideas of her own on macroeconomic policy or currency governance, muddles along making non-decisions, digging her heels in stupidly, delaying then accepting the inevitable, but too late to stop the crisis getting worse... but all the while working within the framework of conventional economic wisdom in Germany.

And as Germany is the economic hegemon within the Eurozone (as largest economy, and most "virtuous", since they are on the credit side of the imbalances), German conventional wisdom, in all its majestic stupidity, is the EU orthodoxy.

It's the madness of this conventional wisdom that we must fight. You are quite right that the conventional wisdom is widely shared by economic policy makers and political elites in other countries (though we may note that the French PS has rejected the "golden rule" that the SPD embraced).

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Sep 8th, 2011 at 08:29:07 AM EST
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 "3) then ensured that the 21 July summit discussed nothing but Greece so it had to wait until the market meltdown of August 5 before Merkel and Wiedmann agreed to even acknowledge that the market was now attacking Spain and Italy and that the EFSF was dead in the water."

But the initially german line - no summit - had be abandoned. Hardly a proof of dictatorship.

 "I said in mid-July that the Council should have called Merkel's bluff and met without her..."

Well, that is their problem, right? Any way it wasn't necessary; Merkel did give in.

by IM on Thu Sep 8th, 2011 at 06:04:11 AM EST
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So she's an idiot dictator? You're arguing that because ordering the tide to stay out didn't work that she's not pivotal in setting policy? What?
by Colman (colman at eurotrib.com) on Thu Sep 8th, 2011 at 06:08:43 AM EST
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pivotal in setting policy - and germany was always pivotal in setting policy in the EU - is not same as dictator.

Regarding the idiocy: Have I created the impression that I am a Merkel fan?

by IM on Thu Sep 8th, 2011 at 06:36:40 AM EST
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Markel did give in to what? To meet and talk about nothing but Greece's second loan tranche when everyone else was worried about whether the EFSF would die of indigestion from having to swallow Spain and Italy?

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Sep 8th, 2011 at 06:16:19 AM EST
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