Frau Bundeskanzlerin calls for coercive powers (aka a nascent transfer union)…

Just been sent a translation of an interview given on German TV by the Frau Bundeskanzlerin, aka Angela Merkel:

“The Chancellor sees no alternative to the euro and calls again, on Gunther Jauch”s show, for a commitment to the stabilisation of Greece.

Regarding the debt-crisis, Merkel very clearly demanded a strengthening of the stabilisation-responsibilities. For this purpose, she said, “there must be a mechanism, for the future, giving the right to intervene and coerce.”

“We must work,” she went on,”for treaty-changes, whereby we can at least arraign member-states before the ECJ – such member-states must be prepared to give up a portion of their sovereignty – any country, which fails to abide by the Stability-Criteria, must be forced to do so.”

As David McWilliams noted in August, what happens if the Germans say enough? Well, they wake up a morality crisis that may not end well for any of us

Bringing in those coercive powers would more gruelling referenda campaigns in the periphery states which could prematurely trigger their own crises… Lots of fun for Ireland’s prospective Eurosceptic President, Martin McGuinness?

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  • Greenflag

    Mick ,

    That link above was in German although there is a ‘translation ‘ facility at the top of the page . The ‘translation ‘ is a bit Germlish i.e english words interspersed with some german word order . Oddly enough I saw the original interview in German and the ‘mother of the nation ‘ did very well despite recent electoral setbacks . But it’s her ‘laissez faire right wing coalition partners who have been decimated and been i have to say this fianna failed out of Berlin . The gist is the while German voters know that their economic future depends on the euro being maintained . Although German industry has ‘swallowed up’ /vertically integrated much of the industrial economies of Poland , Hungary ,Slovakia etc they are still dependent on the Eurozone for the bulk of their exports .

    As an anti dote to Frau Kanzlerin’s ‘ve haff vays of making zem pay ‘ here is a link to the latest Dave McWilliams and Max Keiser head to head on the present Irish economic situation and whats happening out there n the wider economic jungle . For once Max ‘restrains himself and even appears to be learning a few insights from our Dave .

    It’s also a warm up for the next Kilkenomics conference to be held in November in Kilkenny where the worlds top economists and soothsayers or naysayers meet with the best comedians to see if either lot get the ‘real ‘ joke yet 😉

    http://www.presstv.ir/Program/200917.html

  • Everybody agrees that there is a crisis. I would call it a debt and European Constitutional crisis. The call by Merkel for treaty changes bears that out.

    If you want to define the crisis in terms of attitude, I would not call it a morality crisis because it pre-supposes that most Germans are aware of the consequences of not substantially increasing their nation’s level of commitment. They are not. The prime suspect behind the attitude is, as always, self interest.

  • Greenflag

    ‘I would not call it a morality crisis ‘

    Neither would I . They don’t do ‘morality ‘ on either Wall St or in the City or in Frankfurt .As to self interest of course but is it in the ‘self interest ‘ of German , British , Irish, French or American or Greek taxpayers (assuming there are a few left ) or in the self interest of the largest financial institutions in all the above countries ?

    The critical question being asked by taxpayers as voters everywhere is who is actually their elected government and who are they the government serving -the people or the banksters and importantly why ?

  • Greenflag

    BTW heres ‘morality ‘ in action from the heart of the beast for all those lazy fairers out there . He’s quite clear on who actually ‘rules ‘as well and his forecast of even greater impending impoverishment for ‘western middle classes ‘ is no longer incredible .

    http://www.bbc.co.uk/news/business-15059135

  • Mick Fealty

    From Chris’s post (in the linked piece):

    “Whatever happens, Germans lose. The question is whether they lose by doing nothing or by formally supporting banks and/or PIGS. Insofar as there is resistance to the latter, it is founded on morality – a desire to punish sinners – rather than narrow self-interest.

    Herein, I think, lies the cause of the markets’ annoyance at Europe’s lack of leadership. If you regard the crisis as a merely technical one, you’ll see lots of possible fixes – or at least improvements on the status quo – and will therefore be frustrated that these aren’t being pursued.  What you miss is that moral aspect.
    This, though, merely raises a more general point about politics – that there is not only often a clash between moralists and technocrats, but a mutual incomprehension between them.”

  • Greenflag

    In consideration of recent reports that some Irish families are now taking food off the table in order to give more money to the banksters it’s time to recall the great Dean Swift of St Patrick’ss and update his ‘modest ‘proposal in a more up to date style and in consideration of the upcoming kilkenomics festival heres an offering which I hope juxtaposes some of the current hypocracies being covered over by our ‘new ‘ government .

    Ministers Noonan and Gilmore are regularly consulted by the IMF/ECb on how well they were doing at extracting the lifes blood out of the Irish economy in order to satisfy the jaded appetites of international bond traders .

    But alas at a recent meeting they both confessed that the money had run out -banks were still losing deposits and new bankruptcy laws would see an increase of defaults etc etc and so to make up the difference they could offer the ECB and IMF -‘protein ‘ instead -Protein in the form of human flesh which would be worthy of Olli Rehm’s and Monsieur Sarkozy’s sophisticated palates indeed the finest home grown protein in the world no less . In desperation given it was either human protein or default they the ECB agreed.

    For several weeks the ‘protein ‘ was delivered and the ECB and IMF overlords feasted well until they became disgusted with the too regular offerings and began to feel that their neutrino sized consciences were beginning to nag them. .

    ‘This is repulsive disgusting I want no more young Irish protein exclaimed Monsieur Sarkozy and Kanzlerin Merkel while at a joint dinner in Strasbourg and called Messrs Noonan and Gilmore to inform them of their disgust .

    ‘Jawohl Frau Kanzlerin said Noonan – Tres Bien Monsieur Sarkozcy cooed Gilmore – There is no more disgusting and repellent protein than Irish protein .

    But ‘ only a vile ago you ver zayink zat der vas no better protein than ze Irish protein isn’t that right mein Lieber Sarkozcy ‘

    Mais certainment -oui oui said Sarkozcy -I remember Monsieur Gilmore making zat very point. He is now lying non ?

    Silence from the Irish end

    And then jointly from Noonan and Gilmore in all of their coalesced unity of purpose to account for their seeming untruth .

    We wish to assure your majesty’s sorry – Kanzlerin and President that we remain

    ‘The servants of the ECB and the IMF’

    and NOT the servants of the protein !

  • Greenflag

    Mick ,

    ‘a mutual incomprehension between them.”

    Of course but its not as if there are just the two sides to this there are technocrats and technocrats who occupy either end of the ideological spectrum. Keynesians to the left and the neo cons to the right. The ‘moralists ‘ can have a right old time of it critiqing both schools for ever and a day with moral hazarding , unfairness , societal inequities etc etc ad infinitum . Meanwhile in the real economies everywhere one would think that with interest rates at their lowest for 50 years and with ‘labour ‘ cheap as it’s ever going to get (well maybe ) and following a generation of deregulation that
    job creation ‘ on a massive recovery scale should be underway . It isn’t and the question that should be asked of the right and left is why ?

    And the right will tell you that taxes need lowering and that more deregulation is needed to so that businessmen can create jobs blah blah blah and the left will say that government must print more money to kick start the recovery even though there have been several kick starts which have all fallen flat on their faces ?

    The ‘rights’ solution now is what gave rise to the current mess from the 1990’s on and the lefts failure to take account of the of the dangers that would be unleashed on both national and world economies by banks being able to do virtually whatever they wanted up to and including gambling with their depositors monies .

    The conclusion has to be that even the ‘market ‘ has no answers and whats more the market is quite prepared to sit out economic and political armageddon all around them while continuing as that trader in the above link put it – making a whole heap of money during the coming recession.

    Interestingly this young trader could only remember that the 1930s depression brought with it so many opportunities to get rich for those in the know or on the inside . He did’nt spare a thought for the what the 30’s also delivered namely nazi totalitarianism which climbed into power over the backs of the failed german conservative establishment of the time.

  • DC

    I don’t really view it as a moral crisis as such, it is a technical one, financial services used global markets to release credit, the way the credit was structured collapsed in on itself, the insurance schemes supposed to cover the non-payment of all this marketised credit collapsed as well. The credit bubble burst – and the price of property collapsed with it.

    Mistakenly even the best-educated at the time thought it was real growth, but it was just a market technique, where money was shifted from other investment areas and global stock over into credit and marketised mortgages – traded inside global financial markets and then down and out into the domestic property market.

    As I’ve said above, trouble is people believed it was real and would be lasting – that property could go up and up and then stay up – almost like thinking easy money was part and parcel of the new modernity of the West, the easy life, a life in which properties are cash machines and no one has to break a lot of sweat in the process.

    The politicians also fell for it, but they should have known better because they were closer to the action. I realised around end of 2006 time that even old social housing properties were rising up and up – properties in areas with lots of ASB and doorstep drug-selling were at one point on the market for 160k – despite these houses being situated in estates with high unemployment. There was never any real wealth there to be driving those kind of prices. There had to be some other external dynamic to it. And there was – international finance!

    So to try and blame the ordinary Joe by attempting to take some sort of dim moral view on their actions of taking on property that they could barely afford…well…I’m not so sure that that actually cuts it with me. No one expected the bubble to burst.

    All that is solid turns into air – Karl Marx said, but no one reads Marx’s quotes nowadays or gives a damn because it is or was the era of smart arse technology where things like cash machines are always supposed to work, without fail!

    The only proper thing to do is to go back to those who played a big part in blowing up that bubble – freeze the accounts of bankers and then seize their assets – and believe me there will be a hell of a lot of money in their accounts, make no mistake about that. This is a counter attack with pursuit, not a moral action per se, but a counter stroke – a tactic behind the bigger strategy of clawing back money from financial services, which ultimately not only caused the crash but rewarded top employees with obscene bonuses in the process.

    Transferring private banking debt over into the public sector as sovereign government debt instead runs counter to the *logic* of the motions of capitalism. If private banking debt cannot be swallowed by its creator the private sector – I fail to see how the public sector can deal with it. Privatising profits and socialising losses – maybe that is a moral point after all, but it is an abstract moral point.

    The pragmatic approach is laid out above, it is that of freezing bankers bank accounts and taking back the money that they earned during the fictious boom period – taking back the bonuses and bubble earnings earned between the years 2002-08.

    All the other ‘big ideas’ involve capturing future productive wealth – in the form of higher taxes on those in productive employment – to cover what in essence was fools gold – a speculative bubble.

    There will be hell to pay for this.

  • Mick Fealty

    GF,

    The reference is not to theorists, but to the social and political blocks to dealing with the problem how the markets want it dealt with, pragmatically.

    Though it is telling that the closer the hole burns back to Germany the greater the insistence the bondholders get burnt.

    By the by, I heard a great quote ,recently saying that the first duty state owes is to save itself, rather than its banks.

  • Greenflag

    ‘that the first duty state owes is to save itself, rather than its banks.’

    That was’nt from Louis XIV whose ‘L’etat c’est moi ‘ was the role motto for all those absolute monarchs who wielded sole power by divine right ‘

    Nowadays ‘L’etat c’est les bancs et les financiers ‘ seems more apposite and our politicians are in what could be called a ‘Sauve qui peut’ mode with themselves at the top of list .

    ‘L’etat c’est moi ‘ ended on the streets of Paris with Louis’s head in a bucket .

    It will probably take a similar head removal operation in the metaphorical sense for the present crisis to be resolved.

    Kanzler Merkel has now moved up from being mother of the nation (Germany to mother of the Eurozone . Despite the baying of the markets for Greek blood (on their streets mind you) she has succeeded in persuading the Germans to shore up the euro defenses for another few months at least .

    Uncertainty will be prolonged until further notice .
    In the meantime politicians from DC to Dublin and from London to Athens will be playing ‘Sauve qui peut’ . You might think that after three years they would want to play some other game but alas no !