Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
Once again i believe the anti-German parade on this discussion is bit strong. Starvid believes the Eurobond is ruled unconstitutional, as does Migs, citing Münchau. But even he apparently doesn't know.

I don't know for certain, but my financial advisors tell me that the Court has ruled that Eurobonds are not in principle unconstitutional, but that the Bundestag must play a more direct role.

As i've been pointing out, there is much support for the Eurobonds in the Bundestag. How that plays out during financial explosion of course is anyone's guess.

But i'm tired of all the ranting against Germans and Germany, especially at a time when we need far more english speaking Germans on ET. It's right wing economists everywhere who are to blame, and the politicians of all stripes who suck up to them. Not Germans.

There are BILD people in every country. You can argue the Bundesbank is managed by poisonous dinosuars with too much influence on european finance, but you can't forget the majority of German industrialists who want the Euro to survive.

Münchau could even be wrong. /rant

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 07:05:16 AM EST
Barring some sort of putsch, a Socialist (capital-s socialist!) president and parliamentary majority will be in place in France within a year. That will change the picture somewhat.

Unfortunately, the next federal election in Schleu-land is two years away. Grand Coalition (SDP-CDU - preferably without CSU, preferably with Greens) would be an interim solution, it would break the stranglehold of the FDP/Bundesbank dictatorship.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Sep 12th, 2011 at 07:17:16 AM EST
[ Parent ]
At this point anything less than a FdG / Die Linke EU leadership won't be enough. A Jean-Luc Mélenchon (will he be running?) / Gesine Lötzsch summit just might be a game changer. Anyone want to help with the odds against that?

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Mon Sep 12th, 2011 at 08:07:27 PM EST
[ Parent ]
I commented:
We (along with everyone else) may have fallen for the punditocracy's tendentious reading of the court's ruling. However, if their interpretations are correct, no new institutions can be created which don't require the Bundestag to get involved in approving every action. This includes Eurobonds.
I linked to this
For Reinhard Müller the court prohibits the Bundestag to disempower itself

Frankfurter Allgemeine Zeitung's legal correspondent Reinhard Müller lauds the fact that the constitutional court's ruling makes it clear that a disempowerment of Bundestag is unconstitutional. "The German legislator must not accept durable mechanisms in international law that would end in guaranteeing the decisions of other states", Müller writes. Each help that generates costs within the EU and on an international level "must from now on be voted on by Bundestag in each individual case", he concludes.

For Heribert Prantl the limits of EU integration in the Grundgesetz have been reached

For Süddeutsche Zeitung's deputy editor Heribert Prantl the Karlsruhe ruling has defined the limits of European integration as long as the Grundgesetz is in place. "The power of the Grundgesetz ends when the European confederation becomes a federal state", he explains underlining that the European possibilities of the Grundgesetz have been exhausted.  "If more Europe becomes necessary, a European government shall be created - whether you call it an economic government or otherwise. It would then no longer be sufficient to involve the parliament, and a new constitutional basis would needed. This would supplant the Grundgesetz, and would have to be decided by the people".

For Nikolaus Blome Germany has drawn its red lines

After Angela Merkel's speech in Bundestag and the court ruling, Bild's deputy editor Nikolaus Blome explains the chancellor's design for tomorrow's eurozone. "At the moment the euro states are like car drivers who do not respect the traffic rules, who are not afraid of police tickets, who get into accidents and endanger each other", he writes. "That is bad enough. But it is no reason to take the steering wheels out of all cars, the accelerator and brakes. Instead we need more traffic lights, tougher penalties and quick penalties for all breaches, perhaps even taking away the driver's licence." In any way, Blome concludes, Merkel has drawn her "red line" and made it clear that there is "no need for a debt union with euro bonds where Brussels is dictating national budgets and where each individual state guarantees everybody else".  

Who do we believe? Can you find a single pundit, German or otherwise, (and we're not taking it just from Münchau, thankyou very much) who is on record saying that Eurobonds are a possibility now, based on their own reading of the Court ruling?

I haven't tried to read the actual ruling but I would not dare to interpret it myself either because I am not familiar with German constitutional convention...

Economics is politics by other means

by Carrie (migeru at eurotrib dot com) on Mon Sep 12th, 2011 at 07:18:06 AM EST
[ Parent ]
My reading: It's not eurobonds which are unconstitutional, but the ESM or similar Euro mechanisms taken without specific Bundestag approval.

I can't cite anyone specific. I did ask my tax/financial advisors, who are part of the Mittelstand team, who advise many German companies. They specifically said eurobonds are not unconstitutional, unless they don't carry specific approval. I believe what's unclear is the nature of the mechanisms used to administer Eurobonds or equivalent. But that is something the Bundestag could fix.

(I'm very pressed for time today, tough to research further)

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 07:27:28 AM EST
[ Parent ]
I've read this morning that German bank exposure to Greece is 14.x billion euros, slightly larger than France's 13.x, but that Germany's exposure includes the KfW participation in the first bailout.

Isn't that peanuts? Shouldn't casino players be... oh, i give up.

PS. for comparison, KfW is committed to €5B in the first wave of offshore project support for ten projects.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 07:33:11 AM EST
[ Parent ]
The moral hazard involved in handouts to lazy economies makes the whole idea intolerable, even though it would be far cheaper than forcing them to default.

Yes, we realize we are cutting off our nose to spite our face, but it's important to punish the guilty, even if we have to ruin our economy in the process.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Sep 12th, 2011 at 07:57:31 AM EST
[ Parent ]
And if all else fails, we can always shame them by flying their flags at halfmast...

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Mon Sep 12th, 2011 at 08:13:58 AM EST
[ Parent ]
It's funny that this suggestion is viewed as one of the most objectionable, given that it would be one of the least painful to play along with. No way is having your flag at full mast worth five percentage points of unemployment. It's not even a close contest.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 12th, 2011 at 08:39:40 AM EST
[ Parent ]
Narrative...

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Mon Sep 12th, 2011 at 09:07:32 AM EST
[ Parent ]
Offer to fly your flag at half mast and upside down in return for sensible policies! The implications of what CH has posted is that the whole problem is a giant hissy fit by a small group of important German players. Hell! Bernake ought to GIVE them 14 billion euros worth of US$ if they will just use it to cover the losses of the German banks, shut up and get out of the way. In the end, that would be cheaper for all of his TBTF buddies.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 12th, 2011 at 09:09:22 AM EST
[ Parent ]
and stand in the corner, in return for a lower interest rate?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Mon Sep 12th, 2011 at 09:12:46 AM EST
[ Parent ]
Paparendou should go stand in the corner with a dunce cap for being too chicken or too stupid to just default already.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 12th, 2011 at 11:59:57 AM EST
[ Parent ]

   

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Mon Sep 12th, 2011 at 01:29:52 PM EST
[ Parent ]
It is interesting to note that J P Morgan's bonus pool for 2010 was $28 billion and Goldman, who had an off year, had a pool of $18 billion. But were anyone to suggest that the German banks's €14 billion losses be paid, even if part, out of the bonus pools, they would quickly find out what is truly sacred in our world.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 12th, 2011 at 01:32:56 PM EST
[ Parent ]
ARGeezer:
It is interesting to note that J P Morgan's bonus pool for 2010 was $28 billion and Goldman, who had an off year, had a pool of $18 billion. But were anyone to suggest that the German banks's €14 billion losses be paid, even if part, out of the bonus pools, they would quickly find out what is truly sacred in our world.

top comment...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Sep 12th, 2011 at 02:27:51 PM EST
[ Parent ]
Not the most objectionable, the most transparently indicative of how insane the conversation has become.
by Colman (colman at eurotrib.com) on Mon Sep 12th, 2011 at 10:51:45 AM EST
[ Parent ]
If the Bundesbank must approve it then so should every other member state, right?

Which is akin to a new treaty. What the German Constitutional Court has ruled is that the currently existing European institutions cannot issue Eurobonds. A new institution has to be created. There is no time for that, so this here crisis will have to be handled by other methods.

Just take the July 21 agreement. How many member states have done what was required of them, with or without parliamentary intervention?

Economics is politics by other means

by Carrie (migeru at eurotrib dot com) on Mon Sep 12th, 2011 at 08:25:18 AM EST
[ Parent ]
What the German Constitutional Court has ruled is that the currently existing European institutions cannot issue Eurobonds.

Probably not correct either...

Economics is politics by other means

by Carrie (migeru at eurotrib dot com) on Mon Sep 12th, 2011 at 08:31:12 AM EST
[ Parent ]
"What the German Constitutional Court has ruled is that the currently existing European institutions cannot issue Eurobonds.

 Probably not correct either..."

That interpretation is indeed a bridge to far.

by IM on Wed Sep 14th, 2011 at 10:01:37 AM EST
[ Parent ]
Frankfurt does not have jurisdiction to tell existing EU institutions what they can or cannot do. That jurisdiction resides in Strassbourg. Frankfurt only has jurisdiction over what new institutions Germany can participate in without revising its constitution.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 12th, 2011 at 08:34:56 AM EST
[ Parent ]
In theory, perhaps, were a group not including Germany to gain a preponderance of influence over the ECB, and, were that group agree to be bound mutually to a specific amount of obligation, it could take actions to which Germany might object and in which Germany might not participate. If that objection and non-participation does not, in and of itself vitiate the action, Germany would have been presented with a fait accomplis.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 12th, 2011 at 12:28:04 PM EST
[ Parent ]
If a group not including Germany secured control of the ECB, Germany would implicitly be on the hook for their policies as long as they (and the European court in Strassbourg) were willing to accept that the ECB does not have to be solvent to operate. No formal fiscal transfer has to take place.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 12th, 2011 at 01:02:56 PM EST
[ Parent ]
So? It is not only their money. Call it easing by other means. My only concern is if it could be done under the circumstances described - or others.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 12th, 2011 at 01:37:10 PM EST
[ Parent ]
Actually, it would not be German money but it would be done with a currency they share.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 12th, 2011 at 01:40:11 PM EST
[ Parent ]
If a group not including Germany secured control of the ECB, Germany would implicitly be on the hook for their policies...

As if the peripherals are not in just that situation now.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 12th, 2011 at 01:38:50 PM EST
[ Parent ]
A freudian slip?

The german constitutional court is in Karlsruhe.

And the other court is in Luxemburg.

by IM on Wed Sep 14th, 2011 at 10:19:34 AM EST
[ Parent ]
No, just an ordinary cock-up in my German geography. And I did actually think that the European courts were all located Strassbourg (which probably tells you something about the sort of government we've had in Denmark for the last decade).

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Sep 14th, 2011 at 01:59:21 PM EST
[ Parent ]
From three weeks ago.

Chancellor Angela Merkel of Germany on Sunday re-emphasized her opposition to issuing bonds backed by all the euro zone countries, a position that will be greeted enthusiastically by many of her fellow citizens but could unsettle investors at the beginning of what could be another difficult week in global financial markets.

Mrs. Merkel told ZDF television in an interview broadcast Sunday that the so-called euro bonds would be an option only in the distant future.

"It will not be possible to solve the current crisis with euro bonds," she said. She added that "politicians can't and won't simply run after the markets."

"The markets want to force us to do certain things," she added. "That we won't do. Politicians have to make sure that we're unassailable, that we can make policy for the people."

The German finance minister, Wolfgang Schäuble, echoed Mrs. Merkel's comments, saying that common debt would make it easier for governments to avoid pursuing responsible fiscal policies. In any case, he told the newspaper Welt am Sonntag, it would take too long for countries in the euro zone to amend the treaty on monetary union, which would probably be required to allow the issuance of such bonds.

"We have to solve the crisis within the existing treaty," Mr. Schäuble said.

The statements by the German leaders are in tune with public opinion in Germany as well as in other countries, like the Netherlands. The Dutch finance minister, Jan Kees de Jager, told the magazine Der Spiegel in an interview published Sunday that Mrs. Merkel should remain firm in her opposition to euro bonds.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Mon Sep 12th, 2011 at 07:29:11 AM EST
[ Parent ]
3 weeks ago was before the Bundesverfassungsgericht ruling. Also before the Euro cratered from $1.44 to $1.36, and the markets were roiled again. Merkel also said in the article there were no signs of a German recession, which there now are. So, grain of salt in order. (The NY Times didn't interview a shit load of Small/Medium Enterprises.)

Remember, she's trying to stay in power, while her coalition is falling apart around her. Some things she says for the populace, some things she aims elsewhere. Clearly, she, like most, has no clue where this crisis is going.

Likely in Germany, popular support is not the issue. it's what the general industrial leaders, (think Mittelstand, not Siemens) want.

Further: every day there will be all manner of "new developments," so we shouldn't get caught up in dissecting every latest wrinkle. What's important is to realize that her opposition, also "reflects" popular support.

Also, we should read to the end of the article, where other views might be buried:


Opposition to euro bonds is strong within German political circles and among the country's conservative economics establishment because of the perception that the country would wind up subsidizing its neighbors.

But some economists argue that euro bonds would be cheaper even for Germany, because the volume of the bond market would rival that of United States Treasury securities and promote the euro as a reserve currency. That would increase demand for the bonds and lower interest rates.

There is some support for euro bonds in Germany. Leaders of the opposition Social Democrats and Green Party have spoken in favor of common European debt. In addition, the Frankfurter Allgemeine newspaper quoted several members of Mrs. Merkel's governing coalition in Parliament on Sunday as saying that Germany should not rule out euro bonds forever.

While rejecting the bonds, Mr. Schäuble said that Germany would defend the euro "under all circumstances" and that the government categorically rejected suggestions that Greece should leave the euro zone, as some economists have proposed.

So there we have it, nobody knows nothing.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 07:50:27 AM EST
[ Parent ]
These people who purport to "analyse" the bond markets of sovereign states or federations always amuse me, because it depends so heavily on what sort of term structure the central bank decides to create through its open market operations in defence of its overnight target.

It's noise, but these people treat it like signal.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 12th, 2011 at 08:00:27 AM EST
[ Parent ]
it depends so heavily on what sort of term structure the central bank decides to create through its open market operations in defence of its overnight target.

Would Loki not object a diary might be in order.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 12th, 2011 at 02:22:43 PM EST
[ Parent ]
The CB can fix the interest rate XOR the volume of securities outstanding at any given maturity (say, it can fix the yield of 30-year Treasuries IFF it is prepared to accept that it does not control the number of 30-year T-bonds in circulation).

The CB usually decides to fix the term structure of the outstanding sovereign bonds. But this is an atavistic holdover from the gold standard, where the term structure of sovereign bonds actually mattered. If the CB woke up one fine morning and decided to mess with the bond traders' heads a little, it could rearrange the term structure of the sovereign debt outstanding before lunchtime, without in any way impairing its ability to carry out its duties as a central bank. This would, obviously, cause the yield curve to change drastically - remember that the CB can fix the term structure XOR the yields.

Since the CB does not have to disclose its open market operations, and since the term structure of the sovereign bonds in private hands is not published in real time (if it is published at all), the pundits would interpret the new yield curve as being due to all sorts of things "liquidity preference," "short-term default risk," "inflationary pressure" or whatever bullshit just-so story could be made to fit the facts. When in fact it was just the CB adjusting its portfolio for no real operational reason. Or, in other words, noise that got taken for signal.

Conversely, if a bond trader wakes up one morning and decides to restructure his portfolio, there is no operational reason why the CB couldn't simply accommodate him and keep the yield curve where it is. That it chooses not to do so is just as much a policy decision as actively transacting in order to mess with people's heads was above. And so this, as above, is noise mistaken for signal.

Mind you, it's rather expensive noise. It costs the US taxpayers alone on the order of US$ 400 bn in totally unjustified subsidies. It's pretty much the only government-run lottery that has a payout above 100 %.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 12th, 2011 at 02:54:50 PM EST
[ Parent ]
It's pretty much the only government-run lottery that has a payout above 100 %.

And the Fed gets to pick a fairly small population to which to distribute the winnings.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 12th, 2011 at 03:44:00 PM EST
[ Parent ]
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Sep 12th, 2011 at 03:52:57 PM EST
[ Parent ]
Exclusive OR: Either one or the other.

As opposed to ordinary (inclusive) OR, which is one or the other or both.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 12th, 2011 at 04:02:57 PM EST
[ Parent ]
Mark your calendars. Merkel says something that isn't an outright lie. "It will not be possible to solve the current crisis with euro bonds," is completely correct, because the solution to the current crisis is to default.

Eurobonds is the solution to the next crisis.

However, this

The statements by the German leaders are in tune with public opinion in Germany

is the NYT's tea-leaf reading. And I have, shall we say, less than complete confidence in the NYT's ability to (or interest in) ascertaining German public opinion...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 12th, 2011 at 07:52:51 AM EST
[ Parent ]
For those of us out of touch with the mechanics of the Bundestag - how does support there translate into a legislative vote?

(In Britain, effectively only the government can put forward something to be voted on.)

by Metatone (metatone [a|t] gmail (dot) com) on Mon Sep 12th, 2011 at 09:39:08 AM EST
[ Parent ]
Technically, i don't know if a vote must come from the government, or if the opposition can propose.

But there is already a pending vote scheduled for 29 Sept., put forth by Merkel, (on the second tranche of EFSF?). Further, the Court says they  must vote if 'Schland is on the hook. It is this scheduled vote which (so far) has the support of both a majority of CDU and much opposition SPD/Greens as well.

But what happens in the next two weeks is anyone's guess.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 09:54:34 AM EST
[ Parent ]
if the government relies on the opposition to pass legislation, with the FDP voting against?

I mean, is it constitutionally tenable for the FDP to remain in government in this case? Perhaps they could be blackmailed into carrying on : they are the people with the least interest in an early election.

(Recall : FDP 15% at the elections two years ago, flirting with the 4% threshold today, and still calling the shots?)

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Sep 12th, 2011 at 10:38:46 AM EST
[ Parent ]
Sounds  like the PDs in the last government.
by Colman (colman at eurotrib.com) on Mon Sep 12th, 2011 at 10:54:12 AM EST
[ Parent ]
I don't know. I do suspect that the breakup of the government is one of the elephants in the room. The FDP was almost completely shut out of local elections in the section of Niedersachsen surrounding Bremen yesterday, in some cases with as low as 2%. and next Sunday are the elections in Berlin.

PS. The threshold is 5%, though the FDP is flirting with below 4%.
PPS. I met two leaders of the local FDP at a Fest last weekend. Should have seen their faces when i said their underlying economic theory has been totally discredited. They haven't called back as they said.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 10:57:31 AM EST
[ Parent ]
Local FDP leaders learn their lines from their national leaders.  They are not economic theorists. You just told them their religion wasn't true.  How dare you. You must be some hippy Green extremist or agent provocateur.  Vee must keep zat mensch under surveillance...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Sep 12th, 2011 at 11:14:03 AM EST
[ Parent ]
Crazy Horse:
The FDP was almost completely shut out of local elections in the section of Niedersachsen surrounding Bremen yesterday, in some cases with as low as 2%

Diary! Diary! Diary!

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Sep 12th, 2011 at 11:20:00 AM EST
[ Parent ]
the Greens are the (stealthy, secret, backdoor, ulterior; from heimlich) Winner

Regional Results Here (note: the white in the middle is Bremen, and only the region is shown, not all of Niedersachsen.

The CDU had the most with 37%, losing 4.3%. SPD had 34.9%, minus 1.7% Greens nearly doubled to 14.3% in this conservative part of the country. But key is the loss to the FDP, now at 3.4% down from 6.7%.

Remember, this is only for local governments, so in some cases the national party may not play the most important role.

Loved this quote: "FDP regional deputy leader Hans-Heinrich Sander, said his party was after their massive defeat in a deep crisis. The negative sentiment about the federal party had "broken through even in the flat lands"."

Participation was only 52.5%, a touch higher than five years ago.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 11:55:48 AM EST
[ Parent ]
One of the most interesting results is that the SPD took away the mayorship in VW city Wolfsburg from the CDU after 10 years.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Mon Sep 12th, 2011 at 12:07:04 PM EST
[ Parent ]
I can't find that news in any English-language source, not DW, not The Local, nowhere.

This is a change of majority, presumably : CDU/FDP replaced by SPD/Grunen?


It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Sep 12th, 2011 at 12:11:26 PM EST
[ Parent ]
Really? Are you saying that ET is not a news source. or that it isn't in English?
by gk (gk (gk quattro due due sette @gmail.com)) on Mon Sep 12th, 2011 at 12:28:42 PM EST
[ Parent ]
I had just spent ten minutes or so trawling the internets for the information, came back empty-handed and found the news here.

If I had waited a few more minutes, I suppose Google would have brought me here.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Sep 12th, 2011 at 12:35:53 PM EST
[ Parent ]
It did make it to the Washington Times with the title "Merkel surviving German voting despite setbacks". How long will in take until 3% for the FDP becomes "survival"?
by gk (gk (gk quattro due due sette @gmail.com)) on Mon Sep 12th, 2011 at 12:52:02 PM EST
[ Parent ]
Somewhat allied question, How long before Die Linke cannot be kept out of government?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Mon Sep 12th, 2011 at 12:54:11 PM EST
[ Parent ]
Though that article is referring to last week's Mecklenburg-Vorpommern disaster, which was a Landtag vote.

and to AT, Die Linke is in some disarray, and not looking able to capitalize on the current situation. With exceptions.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 01:12:38 PM EST
[ Parent ]
You're right. I assumed that the date of the newspaper was the date of the news...
by gk (gk (gk quattro due due sette @gmail.com)) on Mon Sep 12th, 2011 at 01:19:49 PM EST
[ Parent ]
No, if i read your question correctly. These are all local elections, with the totals i gave being the aggregate. So in some places the guard changed, but the CDU still had the most aggregate votes.

What's important is the aggregate ascendency of the Greens, the well-earned descent and despondence of the yellow FDP, and the ability of the Pirates to have 18 seats in various locals.

Then again, as a prediction of the future, Red-Green is looking exceptionally strong, nearing 50% together. (for the State elections in two years.)

So then, yes, to the other side of your question.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 12:33:58 PM EST
[ Parent ]
Thank you. I had understood that these were both local elections and Landtag elections. So it was a stupid question.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Mon Sep 12th, 2011 at 12:40:21 PM EST
[ Parent ]
Crazy Horse:
and the ability of the Pirates to have 18 seats in various locals

I count more then 18 here:

Piratenpartei Niedersachsen | Klarmachen zum Ändern! : Kommunalwahl 2011

Ergebnisse der KWNDS11

Actually, Piraten had already summed it up in Piratenwiki

Mandate in Landtagen und Kommunalen Parlamenten
Niedersachsen   voraussichtlich ca. 59

Which more then doubles the total local seats of Piratenpartei Deutschland. Now Sunday's state election in Berlin will be very interesting, I've heard they've polled above the 5% limit there.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon Sep 12th, 2011 at 03:34:20 PM EST
[ Parent ]
Sorry, i must have only had our region up on the screen at the time. That was 18, in the Kommune surrounding Bremen from Oldenburg to Cuxhaven.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Mon Sep 12th, 2011 at 04:16:44 PM EST
[ Parent ]
Around 1% statewide. Quite astonishing, if you consider its a local election and that they didn#t put candidates in every county.
by IM on Wed Sep 14th, 2011 at 09:42:33 AM EST
[ Parent ]
I could write a lot about it, being involved and all. But since we are talking abuot local elections, it is not really that interesting.

And the trend was the usual: SPD crumbling, CDU crumbling more, Greens surging, FDP vanishing, Linke inconclusive.

State elections in Berlin will this weekend will tell us a bit more.

by IM on Wed Sep 14th, 2011 at 09:48:39 AM EST
[ Parent ]
I could write a lot about it, being involved and all. But since we are talking abuot local elections, it is not really that interesting.

How involved and "why not really that interesting"? "All politics is local."

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Sep 14th, 2011 at 10:26:51 AM EST
[ Parent ]
A minor election campaign (mayor) and a nominal candidate (council).

Yes, all politics are local. But in say, Goslar they imported a mayor from Bavaria, member of the CSU, who defaeted a SDP/Grüne/FDP candidate handily. That is nice story, but it don't really tells us much about the general political mood in Germany.

by IM on Wed Sep 14th, 2011 at 10:34:59 AM EST
[ Parent ]
Cities are the Research and Development laboratories of the future.  Only cities have the population, infra-structure, and wealth - as well as the tolerance - to support the Creative Class (here and here) from which new solutions will arise.

Which puts DoDo's post a couple of days ago Berlin's Gentrification Row: Locals Rage Against Rising Rents:

Berlin's Kreuzberg and Neukölln districts were once known for cheap rents and diversity. But their edgy urban charm has attracted both affluent residents and international investors, jacking up rents in the process. Now long-time locals are fighting to keep their flats.

Above the gritty caverns and stale air of the Hermannplatz subway station, thousands of Berliners came together last Saturday in the city's Neukölln district in a gesture of solidarity. Middle-aged parents pushed baby strollers alongside leather-clad adolescents with colorful hair, protesting what they all see as the systematic displacement of the city's lower (and even middle) class residents.

critically (IMO) important.  It is these neighborhoods that are the attractors of and for the Creative Class meaning they are the potential incubators of 'What's Next.'  Destroying these neighborhoods eliminates the  social wealth of networks, contacts, meeting places, small businesses, etc. where, eventually, the CC, over time, creates the vibrancy underpinning for economic development.  

Regional and State authorities are spending millions to artificially create a Silicon Valley¹ while the city government of Berlin is busily destroying one!  

This doesn't make a whole lot of sense, putting it mildly.  

The only way to stop this nonsense is for people to get active in local politics and change things around.

Thus, the upcoming Berlin city election is important.

¹  Which emerged spontaneously by the exact process I described in the above paragraph

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Wed Sep 14th, 2011 at 11:43:53 AM EST
[ Parent ]
Well, yes, But I am living in a depopulating town. And in the whole of Lower Saxony there are about two cities,Hanover and Brunswick. I don't really think Salzgitter or Goslar or Oldenburg or even Wolfsburg is a laboratory of the future.
by IM on Wed Sep 14th, 2011 at 12:03:24 PM EST
[ Parent ]
Well ... they could be.  

A quick look at the list of towns you gave allows me to suggest Oldenburg looks like a possibility.  The Carl von Ossietzky University, according to Wikipedia "specializes in cross-disciplinary studies" with a 18,000, or so, student body both of which are Good Things.  The town has a population of ~160,000 meaning there is enough people to support "off-beat, odd ball" ventures.  Close to Bremen so ventures based in Oldenburg can use some of its infrastructure, e.g., the airport, as well as having the potential to attract customers from Bremen, or expand into the city 'on the cheap,' and could also be a source of financing for business expansion.  (?) The plaza in front of the Oldenburg castle could be used as an inexpensive venue for a town market - if it isn't already used as such - for local businesses, offering a wide range of products (and services?) to bring-in people from Bremen.  The port can be leveraged in a couple of different ways as well.

The necessary condition for this is an Oldenburg city government that doesn't have its head up its bum.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Wed Sep 14th, 2011 at 12:43:43 PM EST
[ Parent ]
Financialization eats creative classes for breakfast. I suspect that is what is driving the destruction of the Kreuzberg and Neukölln districts. But the process is either facilitated or impeded by city governments. The cities like development fees, building fees, etc., but it might be nice if they gave some consideration to the long term impact of what they are permitting. But that flies in the fact of dogma that says "markets know best" and that economics is an autonomous sphere upon which evil government must not encroach.  The Kreuzberg and Neukölln districts of Berlin need candidates that will point all of this out, oppose the development and expose the real agendas (I suppose to be) at work.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Sep 14th, 2011 at 01:45:00 PM EST
[ Parent ]
Financialization eats creative classes for breakfast.


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Wed Sep 14th, 2011 at 02:38:08 PM EST
[ Parent ]
5% threshold

Ah. 4% is the Austrian threshold. That means they are closer to oblivion then I thought.

by generic on Mon Sep 12th, 2011 at 11:24:23 AM EST
[ Parent ]
Merkel lacks majority for euro bailout fund - The Local

German Chancellor Angela Merkel's centre-right coalition failed to find a majority for the eurozone rescue fund in a test vote on Monday evening.

(12 Sep 11) Twelve members of Merkel's conservatives and two from their junior partners the Free Democrats (FDP) voted against the European Financial Stability Facility (EFSF), which is meant to prop up eurozone countries in distress. A further 11 MPs from the coalition abstained.

Christian Democratic parliamentarian Peter Altmaier said it was "completely natural" that there would be opposition to the euro bailout at this point in the legislative process and expressed confidence the government would eventually cobble together a majority.

The vote in parliament is planned for September 29.

What happens next...?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Sep 12th, 2011 at 12:22:37 PM EST
[ Parent ]
Much easier to vote no when there's nothing at stake but a test, but with much to gain from some quid-pro-quo.

If the opposition within her coalition remains, however, wheeee.

Meanwhile, FDP chair Rösler's party got hammered in his home state.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Sep 12th, 2011 at 12:38:50 PM EST
[ Parent ]
She wants a majority from only within her coalition. The opposition is actually willing to support her on that (the EFSF vote and the like) but relying on opposition votes is seen as a sign of major weakness and the end of the coalition with the FDP.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Tue Sep 13th, 2011 at 05:08:03 AM EST
[ Parent ]
and dramatically slam the door.

There's no other way out, since Merkel seems endlessly willing to endure the millstone around her neck as she tries to keep her head above water.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Tue Sep 13th, 2011 at 05:14:03 AM EST
[ Parent ]
Only if the FDP would be willing to rescue its share of the vote by around 10%.  I don't think they are that desperate yet.

Perhaps one state election later.

by IM on Wed Sep 14th, 2011 at 09:40:13 AM EST
[ Parent ]
Generally, junior coalition partners in unpopular governments are severely punished at the next election. Electorally, the FDP would be smart to quit now : they might get back above 5% in two years, if voters reward them for taking a stand on principle.

If, on the other hand, they are determined to stay in government out of principle, in order to wreck all attempts at effective crisis management, then I suppose that's ... um... admirable. Suicidal, but admirable.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Sep 14th, 2011 at 11:25:01 AM EST
[ Parent ]
Ah, yes. I assumed that the fall of the government would lead to new elections now. And that would be even more suicidal then hanging on for two years and hoping something will turn up. You assume a new government and elections in two years. But leaving the government would look bad anyway and two years in opposition may not be enough.
by IM on Wed Sep 14th, 2011 at 11:34:09 AM EST
[ Parent ]
"But there is already a pending vote scheduled for 29 Sept., put forth by Merkel, (on the second tranche of EFSF?). Further, the Court says they  must vote if 'Schland is on the hook. It is this scheduled vote which (so far) has the support of both a majority of CDU and much opposition SPD/Greens as well."

The majority of CDU/CSU/FDP is not that big. There are enough dissenters so that the proposal wouldn't get a majority from them alone. It will still pass on SPD and green support, but of course the government would be quite damaged.

And al this will happen after the government will lose another state election this weekend, putting further pressure especially on the FDP.

by IM on Wed Sep 14th, 2011 at 09:54:49 AM EST
[ Parent ]
I would certainly enjoy that.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Wed Sep 14th, 2011 at 11:26:19 AM EST
[ Parent ]
IM, i wasn't implying that the government parties are already a majority, but that the majority of the Bundestag delegates support the vote.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Wed Sep 14th, 2011 at 02:04:36 PM EST
[ Parent ]
Ah, Bundestag CDU/CSU delegates.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Wed Sep 14th, 2011 at 02:10:29 PM EST
[ Parent ]
Yes, that is what I said. But they want a majority of their own.
by IM on Thu Sep 15th, 2011 at 06:07:32 AM EST
[ Parent ]
There are  couple of issues here.

Firstly, Merkel is on record as saying a new EU Treaty is required to address the issues raised by this crisis.  International Treaties, once ratified, by definition, override national constitutions, courts and Parliaments.  German Sovereignty has already been significantly eroded/pooled by the development of the EU.  

The question is, therefore, whether Eurobonds exceed the powers currently transferred to EU institutions under current treaties. That question is ultimately a matter for the European Court, should some EU institution break the current political consensus and issue them.  It is not for the German Constitutional Court to tell the EU what it can or cannot do under existing devolved sovereign powers.

If, as conventional wisdom seems to suggest, Eurobonds are beyond the scope of existing Treaties, then we are down to pragmatic temporary solutions, (as approved by the National constitutional Courts) or a new EU Treaty.  So far, only Merkel seems to be serious about proposing a new EU Treaty, so we cannot blame her for not recognising the limitations of existing Euro institutions.

It all depends on the content of any new Treaty, of course, but right now the political climate for a new Treaty couldn't be worse in many countries, particularly in countries like Ireland where a popular referendum is required.  Unless any such new Treaty explicitly prohibited ordinary people from becoming liable for the losses of TBTF banks, I couldn't see any such Treaty having a chance of being passed.

Basically we need a new Treaty to explicitly provide for the re-structuring of insolvent banks and sovereigns within the Eurozone according to some agreed rules.  Cue Austrian Apoplexy.  We need an ECB with a wider remit (full employment) and broader powers to act as market maker of last resort. Cue exit of all Stark raving mad central bankers.

But the debate on what any new Treaty should contain hasn't even begun because CW doesn't have a clue as to how this crisis can be resolved and new crises prevented. We can blame the entire conservative establishment for that, but at least Merkel has had the foresight to point out that existing EU institutions and legal powers are inadequate.

Indeed I wouldn't be surprised if a new German leader from the Centre-Left will ultimately take the lead on all this.  But first we need a Greek default, and probably a partial Italian one as well before the CW is fully exposed for the bankrupt ideology that it is.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Sep 12th, 2011 at 10:59:35 AM EST
[ Parent ]
Merkel is on record as saying a new EU Treaty is required to address the issues raised by this crisis.

As JakeS has said elsewhere in this thread, that's how you prevent the crisis from repeating itself, not how you resolve the current crisis.

Economics is politics by other means

by Carrie (migeru at eurotrib dot com) on Mon Sep 12th, 2011 at 11:22:44 AM EST
[ Parent ]
Agreed, but unless you regard recurring and unpredictable crises and defaults as a solution, the only way for European elites to even come to grips with the notion that the Euro has systemic problems which require systemic solutions is to start the debate on what is required to prevent them.

If I get the time, I might write a diary on what any new Treaty should look like including elements such as:

  1. A euro wide legal framework for bank restructuring in the event of failure to abide by Basel III capitalisation requirements - specifically ruling out taxpayers as guarantors of last resort - and providing for a harmonised hierarchy of risk sharing amongst investors..

  2. Fiscal harmonisation between member states

  3. Policies and institutions specifically designed to combat structural/regional - e.g. trade - imbalances

  4. Eurobonds

  5. Bank regulation

  6. full employment and productivity/income equalisation

  7. Asset and consumer price inflation control

  8. Tobin tax to disincentivise speculators and other incentives to volatility/gaming the system

  9. Dismemberment of TBTF banks

  10. Social harmonisation (health/education/social welfare) between member states

And no, I don't expect the above to be passed or even proposed any time soon... but that is no reason why we shouldn't start the debate...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Sep 12th, 2011 at 01:04:49 PM EST
[ Parent ]
Even the Basel III gearing limits are grossly inadequate, particularly vis-a-vis currency risk.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Sep 12th, 2011 at 01:12:30 PM EST
[ Parent ]
a) The ESM will pass the parliament

b) The opposition is pro eurobonds

c) I don't know how to interpret the ruling of the constitutional court yet. I think it does prohibits a fiscal union. We have to remember though that on matters of european integration the court has habit of giving sanction to the integration step of the moment but also to draw a line in the sand. And then a few years alter the line is crossed and they draw a new line.

by IM on Wed Sep 14th, 2011 at 10:08:35 AM EST
[ Parent ]

Display:

Occasional Series