BRUSSELS - Peace should not be taken for granted if the euro fails, German chancellor Merkel told MPs Wednesday (26 October) ahead of the eurozone summit where an increase of the bail-out fund firepower may lead to Germany's own state assets being taken as collateral.
In a dark blue jacket reflecting the mood in and about the eurozone, Merkel abandoned her usual cautious rhetoric warned outright of a war.
"Nobody should take for granted another 50 years of peace and prosperity in Europe. They are not for granted. That's why I say: If the euro fails, Europe fails," Merkel said, followed by a long applause from all political groups.
"We have a historical obligation: To protect by all means Europe's unification process begun by our forefathers after centuries of hatred and blood spill. None of us can foresee what the consequences would be if we were to fail."
"It cannot be that sometime in the future they say the political generation responsible for Europe in the second decade of the 21 century has failed in the face of history," the chancellor continued.
She was asking for the parliament's "political" green light on a negotiation mandate for the EU summit, beginning later today in Brussels. The summit is seeking to increase the firepower of the 440 billion-strong European Financial Stability Facility (EFSF) to stop the sovereign debt crisis spreading to countries like Italy and ultimately, France. The Bundestag approved the measure by a large majority, with 503 members in favour, 89 opposing and four abstaining.
While stressing that Germany's contribution to the EFSF loan guarantees would continue to be capped at 211 billion, she said she could not exclude there may be "risks" for Germany linked to the EFSF increase of firepower. Her own party colleagues had demanded that she clearly excludes German state assets, such as the central bank's gold reserves, to be put as collateral for the EFSF lending power.
"Nobody can clearly estimate if there will be such risks. What I can say is that we cannot exclude it," she said, insisting that the current situation is pushing European leaders into "uncharted territories".
"Not to take these risks would be irresponsible. There is no better and more sensible alternative. Europe and the world are looking at Germany," the chancellor said.
Looking ahead to the summit, the chancellor repeated her long-standing stance that "there is no silver bullet, no simple solutions. We will still deal with these topics for years from now."
She repeated her insistence that the EU treaty had to be changed, in the medium term, to be more strict on countries breaching the euro deficit rules.
"Where does it say that any treaty change has to take 10 years or that there should be no more changes after the Lisbon Treaty," she asked.
EU leaders last Sunday agreed to have an evaluation presented to them in December by council chief Herman Van Rompuy about the possibility for a "limited" treaty change.
Continued on Page 47
Posted by: Steve White ||
10/26/2011 12:21 ||
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#1
Yeah, the euro is pretty much what holds Europe together. Europeans figured out that they couldn't stop making war on one another, and wars were driven by need for resources. So, they set up a system by which it's more expensive to go to war than not. A good idea, but jeez it's been managed poorly.
#2
her insistence that the EU treaty had to be changed, in the medium term, to be more strict on countries breaching the euro deficit rules Had the EU followed its treaty and its previously-agreed-upon rules, they wouldn't be in this mess to begin with.
#3
This sounds so familiar. Sounds like a crisis. We have to act now. Don't bother to read anything. Trust me. Like the old sci-fi energy blob that just sucks up everything. The fix just makes the market blob bigger. Germany's collateral and I'll bet you our Fed is a big player in this. Too big to fail I guess. Like arguing with a three hundred pound gorilla, you don't. Sometimes you just have to lie. I would advise each country start printing money as I believe Germany is doing now.
#5
This rhetoric isn't new. In fact Kohl called the Euro a 'question of war and peace' in the 90s. This year one of the likely social democratic repeated this in a public q&a.
The Euro was imposed on Germany by an authoritarian political class.
It might have gained legitimacy and acceptance over the years if it had not turned out to be a catastrophic failure.
As things are the Euro is destroying the very legitimacy of representative Western style democracy in Germany.
#10
German forefathers' quest for European Unification, heh.
Chancellor, if the EU was a serious about unification as you, they would have their finances in order instead of pissing cash into Greece etc. I do agree that a sudden collapse of the Eurozone would be the trigger but the expansion of EU to increase assets to offset debt is over...except for Russia, though I sure to be comforted that it would be sold as Russia joining the EU and not vice-versa.
#11
Here's a news article from 1996 concerning the the German's distrust and fear of the Euro which turned out to be fully justified.
A good reminder, Thump Ginesh6358. I'll have to pull out my old pocket dictionary to help with the vocabulary I've forgotten since we moved away, which will be good for my character. ;-). But it is much more than the Euro which is destroying democracy in Euope; rather, it is the insistence of the bureaucratic class on ruling by regulations, without consulting the intent of either the elected representatives of the voters themselves.
#13
She isn't the first Euro leader to suggest that "unless socialism, war". I think somebody should call her bluff in an entertaining way, simply by suggesting if the Euro fails, a named European country, say Germany, would go to war with another European country, say France.
Which would both cause consternation and point out how ludicrous such a threat really is.
"Italy would have no choice but to invade Austria. England would again invade and conquer Scotland and Ireland. Spain would annex Portugal. Sweden would take over Norway and Denmark."
#14
Obama's Hail Mary "the insistence of the bureaucratic class on ruling by regulations, without consulting the intent of either the elected representatives of the voters themselves".
#15
If the Euro ends up bringing ruin to Germany be it by hyperinflation or some other mechanism, prepare for a new authoritarian Germany, a close ally of Putinist Russia, that will bear a deep grudge against Western Europe.
War is highly unlikely, but this scenario would be very ugly nonetheless. An alliance of the two big losers of the Cold War Russia&Germany would mean a new Cold War in Europe.
Of course the Euro would be the cause of such a development, not a precaution against it.
#16
Peace indeed should not be taken for granted. Tthe ultimate teaching tales of what happens when European elites and theorists seize power is 1) fascism 2) national socialism 3) bolshevik communism 4) Marxism. Though I recognize that Im repeating myself, well, repeatedly.
The problem with Europe (this thought is not original to me) is that the leaders want to return to the days of the Congress of Vienna, in which a circle of people modestly wider than just royalty and bishops but much, much smaller than all the people were to decide how Europe and the civilized world would be run. The EU is just the latest experiment in this regard; a kinder and gentler dictat that would guide the masses, while not nearly as ultimate as the experiments conducted in the 1930s and 1940s.
The fundamental problems with each of these systems are that the elites, of course, arent all that bright in the end, and constantly squabble (with knives, firearms, bombs and perhaps, in the future, nukes) amongst themselves about who will be the head cheese. Its not the most stable way of running a continent.
The Obama administration is just the American implementation (i.e., progressivism) of my list of 1 to 4, above. It has the same problems, beginning with the fact that the American elites are no smarter than the European ones.
No, unfortunately Europe could get a lot worse. It has in the past. Merkel is correct; not about Europe but rather about the transient nature of peace and prosperity. We should be mindful of that warning here in America.
Posted by: Steve White ||
10/26/2011 18:29 Comments ||
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#17
The only way to "fix" the debt problem and keep the Euro is hyper-inflation...
I'm sure a Europe wide Weimar-style republic would be everything it wasn't when the same happened in Germany...
#19
Nobody should take for granted another 50 years of peace and prosperity in Europe
That's right, Frau Merkel. The US is reaching the point that it can no longer support the expense of keeping the Germans down and the Russians out, like we have done since the end of WWII.
Posted by: Rambler in Virginia ||
10/26/2011 20:07 Comments ||
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#20
They worked out a bailout mechanism today. All this talk about the disintegration of the Euro can drop to Defcon 4.
That's the problem, they've worked out 'bailout mechanisms' that won't really work every day for the last four months.
[Financial Times] Italia's prime minister was fighting on Tuesday night to stave off a collapse of his centre-right coalition government over European Union ...the successor to the Holy Roman Empire, only without the Hapsburgs and the nifty uniforms and the dancing... demands for more concrete economic reform measures in time for Wednesday's highly anticipated summit of eurozone leaders.
The demand came as European officials attempted to reach a final agreement on giving the eurozone's 440bn rescue fund more firepower so that it can assist Italia by purchasing Italian bonds, lowering Rome's borrowing rates, which are near 6 per cent.
While such EU assistance falls well short of a full-scale Italian bail-out, senior European officials said it would come with tough new conditions, and that the demands on Silvio Berlusconi ...current Italian prime minister, known for his plain (for a European politician) speaking and his liking for hookers a third his age or less... were the beginning of a more intrusive effort by Italia's eurozone partners to ensure Rome convinces the financial markets it is sincere about fiscal reforms.
Talks early on Tuesday between Mr Berlusconi and his Northern League coalition partners failed to resolve the deadlock -- centred on proposed pension reforms -- after inconclusive negotiations the night before.
"The government is at risk," Umberto Bossi, leader of the fiercely eurosceptic and federalist Northern League, told news hounds in Rome. "The situation is difficult, very dangerous. This is a dramatic moment," he said, warning of possible snap elections.
But Angelino Alfano, secretary of Mr Berlusconi's People of Liberty party, said on Tuesday night that an agreement on reform measures had been reached with the Northern League that would hold the coalition together and assure economic growth. Details were not immedietaly available.
Any Italian compromise that promises future action could be hard to swallow for eurozone leaders seeking a comprehensive solution to the sovereign debt crisis at the Brussels summit, their second in four days. The European Central Bank, which has been propping up Italian debt on the markets since early August, received similar commitments in the past.
Mr Berlusconi's difficulties mirrored tough pre-summit negotiations in other European capitals, where leaders were struggling to finalise the overhaul of the rescue fund and strike a deal with Greek bondholders that would allow them to lower the amount of government bail-out aid to Athens.
#2
Italy comes under the category of "too big to bail" which, combined with the requirement of unanimous agreement among 17 countries, almost guarantees failure.
With 17 coalition governments in place in the Eurozone, the temptation to extort new concessions in return for going along will be strong.
Alot of things have to go right to avoid catastrophe.
Posted by: Frozen Al ||
10/26/2011 8:18 Comments ||
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#3
"Italian gov't on brink of collapse"
is as NEWsworthy as
"Pope wears a pointy hat."
#4
On Drudge we have the "Merkel Miracle". Don't believe it. Lies and more lies. Just a bunch of Zombies(empty vessels) going through the motions. Nothing is fixed. Spain is still in trouble as the rest are.Look at Argentina now that princes has won a landslide. I think Ross Perot saw this coming a long time ago. Looks like Argentina is going Chavez route. Honey I would love to buy that but my outgo is greater than my income. Reminds me of the Palmer tune "She's so fine I don't care where the money went".
#8
All this talk about bail-outs and austerity. Sounds like what they need is an Obama style jobs and economic recovery plan - not just for pizza workers, but for teachers and bureaucrats. That would stimulate the economy and free up resources for infrastructure improvements with new roads, parks and aqueducts. Then they could pay down debt without reducing entitlements and do it all without reducing the level of civility between them and the Germans. Nice Germans, nice Germans.
#10
So how far is Merkel willing to go to save this zombie called the EU? Blow the wad on saving PIIGS and killing Germany, or letting the PIGGS die and saving Germany? That is what it really comes down to for her.
They never got on Greece's or any others when those countries did not hold to their financial standards. No accountability. The free ride is over and now the free ride down the drain begins.
Posted by: Alaska Paul ||
10/26/2011 17:02 Comments ||
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#13
They never got on Greece's or any others when those countries did not hold to their financial standards.
The Germans killed over 5% of the Greek civilian population in WW2, via a combination of deliberate starvation, death camps and the massacre of hundreds (i.e. 100 to 1 ratio) in reprisal for the deaths of individual German soldiers. Now, we say there's no such thing as inter-generational guilt. But has the slate really been wiped clean? Ultimately, I think this shared history is why the Germans will continue footing the bill - they'll play hard to get, but the stench of Germany's campaign of extermination in Greece will permeate Greco-German relations for a long time to come.
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