All Euro Eyes Are On Germany

The Euro is the Deutsch Mark.  On longer term financial charts, the Euro is actually called the DM-Euro.  As far as Germany was concerned, other countries were permitted to join the Deutsch Mark on certain very strict conditions – effectively that the Euro would become as strong as the Deutsch Mark had been.   Kohl sold the common currency to Germans on this basis.

So now ten years after its launch, the German people, not surprisingly feel cheated.  The other countries that rushed to join in 1999, have for the most part abused the privilege, engaging in fraudulent banking practices and losing control of their spending.  Germany now has to choose her response.  The world’s central bankers would gladly bail out the whole fiasco, and sign up for billions in interest payments long into the future.  But Germany will be the effective location of any decision.

German politicians, especially the current Merkel regime will grant the desire of the world’s central bankers if she can, and sign up to huge borrowing.   But she is gradually losing her grip on German political process.  

Open Europe writes –

In De Tijd, MEP Derk-Jan Eppink argues that “the day when the German voter starts doubting the euro, it will crash”, calling regional elections in Baden-Württemberg in March 2011 a “test for Merkel and the euro”.
In Le Figaro, former German Foreign Minister Joschka Fischer argues, “To believe that it is possible to impose stability just through rules, regulations and bureaucratic sanctions within a eurozone with multiple-speed economies will prove to be a false idea.” In a comment piece in Le Monde, Pierre-Antoine Delhommais argues that Germany’s leadership in the eurozone will grow stronger and “the euro will really speak German” if Axel Weber manages to obtain the post of ECB President in 2011.

The Frogs are dead keen on Germans carrying the whole edifice as long as possible.  All top jobs are now available, where once only Frenchmen or Belgians could walk.


In the FT, Romano Prodi, former Italian Prime Minister and former European Commission President, argues “When I see Germans balking at the Greek or Irish rescue packages, exposing the euro to serious strains, I wonder why they do not see that most of their great economic strength has been possible thanks to the single currency and its success in preventing competitive devaluations”.

Gee.  Thanks, Romano.  Germany’s really grateful for you Italians spending all her money.  Hey!  Ain’t you some kinda Russian agent.  At least that’s what Litvinenko said, before your charming lot had him silenced.


In the Telegraph, Ambrose Evans-Pritchard, International Business Editor, notes that “To those who blithely argue that EMU is a good racket for German exporters because it locks in Germany’s competitive advantage, he [Hans-Werner Sinn, head of Germany IFO institute] retorts that a trade surplus is the flip side of a capital deficit. Germany has seen €1 trillion – or two thirds of its entire savings since 2002 – leak out to fund the EMU party, gutting investment at home. This is toxic for Germany too”.

As the PIIGS pop one by one, and the OWG salivates at the prospect of signing the whole continent up in a system of Euro-bondage, ordinary Germans may yet spoil their party, and start heading for the Euro exit, if they can only find the door.
The Tap Blog is a collective of like-minded researchers and writers who’ve joined forces to distribute information and voice opinions avoided by the world’s media.
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