Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
I you think a few utterances of the bundesbank are more relevant then the actual decisions of the governing council of the ECB, you are smoking the wrong stuff. Or dabble in conspiracy theory.

And as you admitted by throwing in along with the press, media is much more relevant.

by IM on Fri Sep 7th, 2012 at 04:56:46 AM EST
[ Parent ]
Well, there's the decision of the German Constitutional Court, which might yet kill the ESM and with it the ECB's policy announced yesterday:
54% of Germans want the Constitutional Court to say No

Most commentators are heavily discounting a Yes, or Yes but vote by Germany's Constitutional Court on the ESM next week. Spiegel Online reports of a poll showing that 54% of Germans want the court to say No. Only 25% want the Court to reject the case. The poll shows that the German public has become increasingly hostile (a sentiment no doubt whipped by the Bundesbank and comments such as those above.)  53% are against transferring further competences to the EU, while 43% want Greece out of the eurozone. Der Spiegel made the point that a No vote by the Constitutional Court would also automatically killed off Draghi's OMT.

In another article, Spiegel reports on the political reaction to the decision. Most of it is unremarkable. But we were struck by a comment from Jurgen Trittin, head of the Greens in the parliament, who said that the OMT would greatly increase the risk that Germany's ESM contribution and credit guaranties would be defaulted on. He said by refusing eurobonds, Angela Merkel has forced the ECB to monetise debt through the backdoor.

(Eurointelligence upthread)

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 05:16:53 AM EST
[ Parent ]
The court isn't the bundesbank or the ecb.

And they have never said no to an european treaty before.

by IM on Fri Sep 7th, 2012 at 05:24:00 AM EST
[ Parent ]
The Court will have to adjudicate between the Bundesbank and its fans, and the German industry which has finally come out in support of the Euro. And, of course, Merkel has hedged her bets by supporting Weidmann publicly and having her man Asmussen support Draghi, so she will come out on top in any case. I suspect that Schäuble will burn out of this one, too.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 05:44:48 AM EST
[ Parent ]
They have to decide on constitutionality. There is a shift from parliament and its budget rights to the executive. Perhaps a shift too far.
by IM on Fri Sep 7th, 2012 at 05:53:11 AM EST
[ Parent ]
It would be great if the outcome of all this were to subordinate the ECB to the European Parliament.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 06:07:50 AM EST
[ Parent ]
Everybody who claims that there will be a "No" from the Constitutional Court next week, hasn't paid attention. (And, yes, I know that's all of our media.)

Das Bundesverfassungsgericht The Federal Constitutional Court
Die Anträge sind darauf gerichtet, dem Bundespräsidenten bis zur Entscheidung über die jeweilige Hauptsache zu untersagen, die von Bundestag und Bundesrat am 29. Juni 2012 als Maßnahmen zur Bewältigung der Staatsschuldenkrise im Euro-Währungsgebiet beschlossenen Gesetze zu unterzeichnen und auszufertigen.The requests are directed to ban the President from signing the laws adopted by the Bundestag and the Bundesrat on the 29th of June 2012 as measures to tackle the sovereign debt crisis in the euro area until the decision on the particular main decision.

The court will either decide the law can be put in force or it will decide there must be a ruling in the matter (next year or so).  I find the former is more likely. The court will NOT decide on the constitutionality next week.

by Katrin on Fri Sep 7th, 2012 at 06:32:40 AM EST
[ Parent ]
So if they decide to kick the can down the road for another 6 months, what happens to the ESM?

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 06:39:22 AM EST
[ Parent ]
More likely yes, but not assured,

And in in the current situation a stay would be enough to wreck the eurozone.

by IM on Fri Sep 7th, 2012 at 06:41:26 AM EST
[ Parent ]
I'm almost rooting for the Court to give 54% of the German public the train wreck they crave.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 06:45:21 AM EST
[ Parent ]
But the joke will be on us all.
by IM on Fri Sep 7th, 2012 at 06:46:09 AM EST
[ Parent ]
Spain has already been destroyed.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 06:46:40 AM EST
[ Parent ]
Unless some sort of loophole is found, yes. The court is aware of that, though. I don't believe they will decide on (another) stay. And that means Merkel's strategy of postponing a decision until it is too late for a meaningful debate will have won again.
by Katrin on Fri Sep 7th, 2012 at 06:47:09 AM EST
[ Parent ]
There is no conspiracy theory. The Bundesbank's constant communication on the euro crisis (a few utterances, lol!) has had a real effect.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Sep 7th, 2012 at 05:55:01 AM EST
[ Parent ]
It did. It effected a total isolation of weidmann in the ecb governing council.
by IM on Fri Sep 7th, 2012 at 05:58:46 AM EST
[ Parent ]
What explains the public disagreement between Jörg Asmussen and Jens Weidmann?

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
by Migeru (migeru at eurotrib dot com) on Fri Sep 7th, 2012 at 06:01:38 AM EST
[ Parent ]
Easy. As a social democrat Asmussen gets his marching orders out of the Willy Brandt-Haus.

Seriously:

I think Asmussen is because of his long career inside the finance ministry more used to public diplomacy and the necessity of compromise. He is also used to support his boss in public, in this case Draghi.

Weidmann is more a product of the absolute and irresponsible Bundesbank culture.

Not much of an explanation but the best I can muster.

 

by IM on Fri Sep 7th, 2012 at 06:28:47 AM EST
[ Parent ]
A man who plans his career as a Bundesbanker can only win if the Euro and the ECB break up. A man who plans a political career in the next grand coalition has a different angle.
by Katrin on Fri Sep 7th, 2012 at 06:38:59 AM EST
[ Parent ]
Yes, perhaps.
by IM on Fri Sep 7th, 2012 at 06:45:43 AM EST
[ Parent ]
Four years too late.
by Colman (colman at eurotrib.com) on Fri Sep 7th, 2012 at 06:15:07 AM EST
[ Parent ]
perhaps. But that is a matter of shifting majorities on the council, not mystical Bundesbank powers.
by IM on Fri Sep 7th, 2012 at 06:29:40 AM EST
[ Parent ]
The disproportionate political influence of the Bundesbank has been one of the core problems here. No one has ever put forward mystical powers, it's been a political problem.
by Colman (colman at eurotrib.com) on Fri Sep 7th, 2012 at 06:47:56 AM EST
[ Parent ]
What influence?

Weber (and Stark)

resigned. And Weidmann is outvoted again and again.

by IM on Fri Sep 7th, 2012 at 06:53:14 AM EST
[ Parent ]

Display:

Occasional Series