The stark choice: Increase German debt or save the Euro

[sasguru]

Germans now face a stark choice, save the Euro and end up more indebted than the UK or US or let it fail.


The dangerous subversion of Germany's democracy – Telegraph Blogs

If there really is a secret, undemocratic and unconstitutional 2 trillion euro deal (and that is a minimum realistic amount), then where is it come from?
Germany's national debt is already almost as bad as Britain's.

[Arturo Bassick]

Germans now face a stark choice, save the Euro and end up more indebted than the UK or US or let it fail.


The dangerous subversion of Germany's democracy – Telegraph Blogs

If there really is a secret, undemocratic and unconstitutional 2 trillion euro deal (and that is a minimum realistic amount), then where is it come from?
Germany's national debt is already almost as bad as Britain's.

I think German democracy is inviolate. I think there are legal reasons that they can only go so far. There were questions as to whether the last Greek bailout was legal and I seem to recall that the answer was "only just" and that answer set out the limitations of any further action.

[sasguru]

I think German democracy is inviolate. I think there are legal reasons that they can only go so far. There were questions as to whether the last Greek bailout was legal and I seem to recall that the answer was "only just" and that answer set out the limitations of any further action.

What seems to be happening is that the politicans are cooking up a secret deal without the knowledge of the German voter, knowing it would take too long/be unacceptable to go the legal referedum route. German democracy is being subverted again, albeit this time for the greater good, ironically.

[Arturo Bassick]

What seems to be happening is that the politicans are cooking up a secret deal without the knowledge of the German voter, knowing it would take too long/be unacceptable to go the legal referedum route. German democracy is being subverted again, albeit this time for the greater good, ironically.

If they take that route, for the greater good or not, they run the risk of a long stretch in a German nick.
Any secret deal would have to break cover at some point and an injunction would be quick enough to stop it. That is what almost killed the last bail out.

[chef]

What seems to be happening is that the politicans are cooking up a secret deal without the knowledge of the German voter, knowing it would take too long/be unacceptable to go the legal referedum route. German democracy is being subverted again, albeit this time for the greater good, ironically.

I presume you are referring to WW2? which is quite a fair amount of time ago and the recent bailout was discussed in public, so what exactly are you suggesting the German public should do even if your subversion theory is true?

I'd be fairly willing to bet that a lot more will be announced to the German public and they will have a greater say in matters than say recent events with some politician stating "call me toni" and a one eyed bumbing "i saved the world" fool screwing up a country's financial system beyond belief.

[sasguru]

If they take that route, for the greater good or not, they run the risk of a long stretch in a German nick.
Any secret deal would have to break cover at some point and an injunction would be quick enough to stop it. That is what almost killed the last bail out.

If you are right and there's no secret deal, say sayonara to the world economy for the next 10 years.
And if there is a worldwide slump, make no mistake, exporting countries like Germany will feel the full brunt as demand falls off a cliff.

[sasguru]

a one eyed bumbing "i saved the world" fool screwing up a country's financial system beyond belief.

I'm not a fan of El Gordo by any means but is really fair to blame him for a worldwide crash caused by CDSs on subprime mortgages.
Yes there should have ben better regulation but that applies to the US and Germany too.
Every country in the West was screwed over but I don't think the bumbling moron El Gordo was responsible for most of the West living beyond their means - which is the real cause of this crisis.

[MrRobin]

It must be bad... the Germans are late in announcing the result of the vote!

[Mich the Tester]

It must be bad... the Germans are late in announcing the result of the vote!

Don't say they've got 'nul points' again. Bring back Guildo Horn!

[BlasterBates]

Ambrose likes to exaggerate because it makes good reading

The problem is not Greece, Greek debt is not that large and you can fairly easily go through a restructuring, and this will happen. The trouble is it can't happen now, because Italy and Spain need to get their finances in order first. Their current deficits are high (but lower than the UK's) and a Greek default would set interest rates spiralling, which would trigger a major problem. Once Italy and Spain have their current deficits under control, Greece will be retrsuctured. When this happens it's the banks and the insurance companies that will be hit. But it won't be massive because their bonds are already discounted by 50%.

The other thing to bear in mind is that although some members of Merkel's party oppose the new fund all opposition parties support it, and they're riding high in the polls. So she can push it through easy peasy with the opposition.

The British "Anti-Euro" establishment is enjoying blowing this up, as there is nothing more satisfying than "I told you so" gloat. They predicted the Euro was imminently going to break up in 2008, they are now and they will be in 2018. But it won't. Germany will probably have a balanced budget next year, whereas UK is gushing out of it's aorta. If I were in the UK I think I would be worrying about the UK's finances.

reminder of the UK's finances

...though it has improved a tiny bit, with the "austerity" budget

Mark my words, Europe is not the big problem, it's being solved. In fact Greece has been like a sharp short shock therapy forcing all Eurozone to cut deficits to almost 0. The UK will continue to gush out it's aorta and when Labour get's in I suspect it won't be long before they will be off to the IMF with a begging bowl. The US has a huge problem brewing unless it can get it's spending under control.