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Is Germany about to dump the EuroZone project? EuroSceptic hysteria consumes Berlin.

Alcuin Bramerton

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To save its banks, Germany is being forced to actively consider leaving the EuroZone. Neither the German Ministry of Finance, or the Bundesbank, or the major German commercial banks can afford to finance the anticipated multi-trillion rising costs of successive EuroZone sovereign default bailouts. Nor is it politically or legally possible, inside Germany, to get a democratic consensus behind such an attempt at EuroZone salvation.


Speaking at the Jackson Hole banksters wake on Saturday 27th August 2011, Christine Lagarde, Managing Director of the International Monetary Fund, said that Western banks needed urgent recapitalisation. If this is not addressed we could easily see the further spread of economic weakness to core countries, and a debilitating liquidity crisis. The most efficient solution, she argued, would be mandatory substantial recapitalisation. (AB comment: This would be achieved immediately if the $47 trillion World Global Settlement Funds were released, and if the Basel-mandated $10 trillion US Dollar Refunding Project was implemented. Both schemes are fully capitalised and ready to run.) But apart from Washington, nowhere in world economics is the political inertia and policy paralysis more evident than in Germany.


The seething discontent in Germany over Europe's debt crisis has spread to all the key institutions of state. The latest tally of votes in the Bundestag indicates that 23 members of Angela Merkel's own coalition group plan to vote against the EuroZone bailout package, including twelve of the 44 members of Bavaria's Social Christians (the CSU).


Christian Wulff, the German President, has accused the European Central Bank of going far beyond its mandate with its mass purchases of Spanish and Italian debt. Wulff warned that the EuroZone's headlong rush towards fiscal union strikes at the very core of European democracy.


The Bundesbank has condemned the ECB's bond purchases and has warned that the EU is drifting towards debt union without democratic legitimacy or treaty backing. Joahannes Singhammer, leader of the CSU's Bundestag group, accused the ECB of acting dangerously by jumping the gun before sovereign national parliaments had had a chance to vote on the issue.


A CSU document released on Monday 29th August 2011, flatly rebuts the latest emergency accord between the German Chancellor, Angela Merkel, and the French President, Nicholas Sarkozy. The CSU says that plans for an economic government for EuroZone states are unacceptable. The document demands treaty changes to allow EMU states such as Greece, Ireland, Spain, Portugal, Italy and France to go bankrupt, and to eject them from the Euro altogether for serial financial abuses.


More developing EuroCrash background and analysis can be found here (29.08.11), here (29.08.11), here (29.08.11), here (28.08.11), here (28.08.11), here (28.08.11), here (28.08.11), here (28.08.11), here (27.08.11), here (27.08.11), here (26.08.11), here (24.08.11), here (24.08.11) and here (22.08.11).



Aug. 29, 2011