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As time passes, the rifts between the Bundesbank and the ECB grow
wider. So do the rifts between
what German citizens want and what German chancellor
Angela Merkel is willing to do to "save the
euro".
Merkel increasingly (and
as expected) does what she need
to do to preserve he legacy, consequences (and
Germany) be damned.
Please consider Merkel tries to calm
storms over Greece, ECB policy
Angela Merkel tried
to calm a growing storm over euro zone crisis strategy on Sunday after the Bundesbank likened
ECB bond-buying plans to a dangerous
drug and a conservative ally
of the German leader said
Greece should leave the currency bloc by next year.
The comments, from
central bank chief Jens Weidmann and a senior figure in
the Bavarian Christian Social Union (CSU),
Alexander Dobrindt, point to mounting
unease in Germany with
the policies being used to combat the three-year old debt crisis.
"We are in a very decisive phase in combating the
euro debt crisis," Merkel told public broadcaster ARD in an interview. "My
plea is that everyone weigh their words
very carefully."
Dobrindt, whose party is preparing for a regional election in Bavaria
and the federal vote next
autumn, told top-selling German daily Bild he
expected Greece to leave the euro zone in 2013. His comments drew a swift rebuke from Foreign
Minister Guido Westerwelle
who said "bullying" of euro members
must stop.
But Weidmann, a former economic adviser to Merkel, said in a front-page interview
in influential German
magazine Der Spiegel that the bond buys could violate
rules against the ECB providing outright financing to governments.
"Such a policy is for me close to state financing
via the printing press," Weidmann
told Spiegel. "In democracies,
it is parliaments
and not central banks that
should decide on such a comprehensive pooling of risks. We should not underestimate the risk that central bank financing can become addictive like a drug," Weidmann said.
Dobrindt was more direct,
saying Draghi risked passing into the history books as the "currency
forger of Europe".
Merkel's Disingenuous Pledge of
"Help"
I really do not know why Merkel is so
revered, although feared I can certainly understand. She is a skilled
politician, very adept at saying
one thing and doing another, yet not getting challenged on it.
For example, Merkel Vows
to Help Greeks Stay in
Euro Zone
Read that article (or any
other recent article on
the subject) and tell me exactly
what she is willing to do other than offer
moral support. You will not find
anything concrete because she is
willing to do precisely nothing, right now.
She cannot give Greece more time or money because her coalition is likely to splinter if she does. However, her pledge of "help" will absolve her of blame when Greece
does leave.
More importantly, she is willing to let Draghi do most anything because she recognizes that she must, to have a chance at keeping
Spain and Italy in the fold.
Decisive Phase
When Merkel says "We are in a very decisive phase in combating the euro debt crisis" she is speaking as much about her own precarious position as the precarious position of the euro.
Merkel Achieves
the Impossible Dream (For Now)
·
Merkel got away with promising Greece citizens help while doing nothing
·
Merkel got away with promising German citizens there will be
no fiscal union until there
is a political one, while simultaneity offering explicit support for the "Currency Forger of Europe"
Merkel is very adept at
talking out of both sides of her mouth simultaneously, each saying a
different thing, and getting away with it.
Reagan may have been the Teflon
president, but Merkel is the Teflon chancellor.
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