Merkel Rejects Rapid Action on the Euro

[alp227]

Source: NYT

Quashing recent speculation of a softening in Germany’s hard-line stance on the euro, Chancellor Angela Merkel repeated on Thursday her firm opposition either to bonds issued jointly by the euro zone countries or to an expansion of the role of the European Central Bank as quick responses to the sovereign debt crisis.

“Nothing has changed in my position,” she said at a news conference with Italian Prime Minister Mario Monti and French President Nicolas Sarkozy in Strasbourg, in eastern France.

But with signs of spreading contagion — a weak bond sale Wednesday in Germany that lifted rates there, rates on sovereign debt rising to unsustainable levels in Italy and Spain and interbank lending in Europe beginning to dry up — questions remained about just how long Germany can resist the persistent calls for action.

The German newspaper Bild reported Thursday that the Merkel government was inching towards accepting so-called eurobonds, at least in some form, even if the public stance remained against them, and that some of her party said they could be a tradeoff for treaty changes. “We aren’t saying never,” Norbert Barthle, a legislator from her coalition told journalists. “We’re just saying no eurobonds under the current conditions.”

Read more: http://www.nytimes.com/2011/11/25/world/europe/merkel-rejects-rapid-action-on-the-euro.html?pagewanted=all

[unkachuck]

1. "...sovereign debt rising to unsustainable levels in Italy..."

....if the international banksters want to shake-down the EU for their bad gambling debts, they ought to go directly to Italy and Spain and negotiate, and not expect Germany to underwrite the deal....

"Nothing has changed in my position,"....hang in there, Angela....

[bossy22]

2. bad gambling debts?

this isnt the "banksters" fault. Banks hold government securities as a "good as cash" investment. Now these government securities at the time of purchase were high rated, but now they are garbage- so what was once considered safe capital is now no more good than trash. In fact, the banks are more victims of a system (the euro) that did not take into account national individuality of its member states. The banks didnt push Greece et al into this situation, what pushed them in was the inability to use monetary policy to fix their lack of competitiveness and flow of capital.