Anyone wondering if The One's insane spending spree will work need look no further than Germany.
Angela Merkel let the US know she wasn't going to lead her country over the cliff, just 'cuz The Winner of The 2010 Nobel Peace Prize sez so.
They're on the rebound. We're not.
BTW, they didn't gut their educational system in the name of political correctness.
They don't punish success like we do.
They produce stuff, like actually design and make stuff. We don't seem to do that anymore.
They know socialism is an inherent failure--they need merely look at the devastation wrought in the former East Germany.
They also know that charismatic politicians from unknown backgrounds speaking in Messianic tones are really, really, REALLY not good for one's health.
We're just now learning that one...
Showing posts with label Germany. Show all posts
Showing posts with label Germany. Show all posts
Friday, August 13, 2010
Tuesday, April 20, 2010
German Finance Minister Wolfgang Schäuble: Thrust, Parry, Evade, Repeat
Der Spiegel interviewed the Finance Minister last week, who seemed anxious to reassure the readers that 'No, we aren't going to bail Greece out', while assuring Greece that it wouldn't be allowed to fail.
It sounded like a few pages out of a John LeCarre novel. Bold emphases supplied by OS, because they bear reading. This guy is worried, and isn't telling half of what his fears might be.
SPIEGEL: Let's talk about Greece and the euro crisis. In 1992, a prominent member of Germany's center-right Christian Democratic Union, to which you belong, made the following promise to German citizens: "If a country accumulates high deficits as a result of its own behavior, neither the (European) Community nor a member state is obligated to help that country." Do you know who said that?
Schäuble: A lot of people could have said that.
SPIEGEL: It was the current German president, Horst Köhler, who negotiated the terms of the European Monetary Union (EMU) at the time, in his capacity as a senior official in the German Finance Ministry. Does the sentence still apply today?
Schäuble: I'm a firm believer in the monetary union. At the time, I felt exactly the same way as the current president. The only problem is that the world has changed. The capital market has become globalized to a degree that we couldn't have imagined at the time. And we have experienced a financial crisis from which we in Europe must draw a clear lesson: We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers.
SPIEGEL: You are exaggerating. In past years, it's happened again and again that a country couldn't pay its debts, and yet that hasn't led to a collapse of the global financial system. Why should this be different in Greece's case?
Schäuble: Because Greece is a member of the European monetary union. Greece's debts are all denominated in euros, but it isn't clear who holds how much of those debts. For that reason, the consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank.
Is that the phone we hear ringing at the Fed and Treasury?
But wait, there's more!
SPIEGEL: That's not how German citizens have understood the monetary union. They were assured that the euro would be as stable as the German mark. Now their tax money is going to a country in which a quarter of the population works in the public sector and pensions are often higher than salaries. Is this the way to boost confidence in the euro?
Schäuble: I would caution against fueling cheap populism. First of all, every German who has spent a vacation in Greece knows that the standard of living there isn't higher than it is in Germany. Second, Greece is paying a high price for European assistance.
SPIEGEL: Nevertheless, for months the German government was vehemently opposed to government bailouts for Greece. Why did you give in and agree to the EU rescue plan that was recently hammered out and which will involve Germany forking out €8 billion ($10.7 billion) if Greece goes belly up?
Schäuble: We didn't give in. We have always said that before we talk about assistance, Greece has to do its homework first. Meanwhile, the Greek government has approved a credible austerity program that involves serious cutbacks for its citizens, and it even had to step up those measures recently. This is why the German government is now prepared to take on responsibility at the European level.
SPIEGEL: We understood the chancellor's words differently at the time.
Schäuble: That must be your interpretation.
Not even John LeCarre can make this sort of stuff up...and the US is headed in the same direction with its spending.
Once again, the questions arise: Who bails us out in ten years? A grateful Europe?
Do the people at the helm in Washington understand? Do they intend this?
It's wall-to-wall Ivy League degrees in the upper reaches of our government. It isn't like they are not intellectually adept.
It sounded like a few pages out of a John LeCarre novel. Bold emphases supplied by OS, because they bear reading. This guy is worried, and isn't telling half of what his fears might be.
SPIEGEL: Let's talk about Greece and the euro crisis. In 1992, a prominent member of Germany's center-right Christian Democratic Union, to which you belong, made the following promise to German citizens: "If a country accumulates high deficits as a result of its own behavior, neither the (European) Community nor a member state is obligated to help that country." Do you know who said that?
Schäuble: A lot of people could have said that.
SPIEGEL: It was the current German president, Horst Köhler, who negotiated the terms of the European Monetary Union (EMU) at the time, in his capacity as a senior official in the German Finance Ministry. Does the sentence still apply today?
Schäuble: I'm a firm believer in the monetary union. At the time, I felt exactly the same way as the current president. The only problem is that the world has changed. The capital market has become globalized to a degree that we couldn't have imagined at the time. And we have experienced a financial crisis from which we in Europe must draw a clear lesson: We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers.
SPIEGEL: You are exaggerating. In past years, it's happened again and again that a country couldn't pay its debts, and yet that hasn't led to a collapse of the global financial system. Why should this be different in Greece's case?
Schäuble: Because Greece is a member of the European monetary union. Greece's debts are all denominated in euros, but it isn't clear who holds how much of those debts. For that reason, the consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank.
Is that the phone we hear ringing at the Fed and Treasury?
But wait, there's more!
SPIEGEL: That's not how German citizens have understood the monetary union. They were assured that the euro would be as stable as the German mark. Now their tax money is going to a country in which a quarter of the population works in the public sector and pensions are often higher than salaries. Is this the way to boost confidence in the euro?
Schäuble: I would caution against fueling cheap populism. First of all, every German who has spent a vacation in Greece knows that the standard of living there isn't higher than it is in Germany. Second, Greece is paying a high price for European assistance.
SPIEGEL: Nevertheless, for months the German government was vehemently opposed to government bailouts for Greece. Why did you give in and agree to the EU rescue plan that was recently hammered out and which will involve Germany forking out €8 billion ($10.7 billion) if Greece goes belly up?
Schäuble: We didn't give in. We have always said that before we talk about assistance, Greece has to do its homework first. Meanwhile, the Greek government has approved a credible austerity program that involves serious cutbacks for its citizens, and it even had to step up those measures recently. This is why the German government is now prepared to take on responsibility at the European level.
SPIEGEL: We understood the chancellor's words differently at the time.
Schäuble: That must be your interpretation.
Not even John LeCarre can make this sort of stuff up...and the US is headed in the same direction with its spending.
Once again, the questions arise: Who bails us out in ten years? A grateful Europe?
Do the people at the helm in Washington understand? Do they intend this?
It's wall-to-wall Ivy League degrees in the upper reaches of our government. It isn't like they are not intellectually adept.
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