Saturday, March 16, 2013

The Mess in Europe - Will Germany Pull the Plug on the Euro and EU?

There can be no question that Germany is the powerhouse economy of Europe with a whopping 20.2% of the European Union's total GDP, followed by France (15.8%), Britain (13.9%) and Italy (12.7), here.  As wealth transfers from Germany to weaker and poorer EU nations have accelerated over the years, the Germans are growing weary of constantly bailing out their incompetent, corrupt and irresponsible neighbors.  In fact, the German people are stirring up a hornets nets of anti-EU rage.

While Angela Merkel is fully committed to sustaining the EU and the Euro, whatever the cost, the German people are embarking on a populist crusade similar to the populist movement fired up in Italy by comedian turned politician Beppe Grillo whose rise in electoral power has shocked the establishment and its banksters, here.

The Telegraph reported that 65% of the German people think the Euro is damaging and 49% believe that Germany would be better off outside the EU.

Germany's anti-euro party is a nasty shock for Angela Merkel The Telegraph
A new party led by economists, jurists, and Christian Democrat rebels will kick off this week, calling for the break-up of monetary union before it can do any more damage.

"An end to this euro," is the first line on the webpage of Alternative für Deutschland (AfD). "The introduction of the euro has proved to be a fatal mistake, that threatens the welfare of us all. The old parties are used up. They stubbornly refuse to admit their mistakes."

They propose German withdrawl from EMU and return to the D-Mark, or a breakaway currency with the Dutch, Austrians, Finns, and like-minded nations. The French are not among them. The borders run along the ancient line of cleavage dividing Latins from Germanic tribes.

The plans draw on work by Hans-Olaf Henkel, former head of Germany's industry federation (BDI) and a chastened europhile -- the "worst error of my professional life", he told me.

The appeal of German exit is obvious. It is the least traumatic way to end the 20pc to 30pc misalignment between North and South, the cancer eating Europe. Club Med keeps the euro. It enjoys instant devaluation, while still able to uphold euro debt contracts. The spectre of sovereign defaults recedes....

Should she sign off on a bail-out out for Cyprus -- safeguarding the "dirty funds of Russian oligarchs", as the AfD puts it -- she will be raked by heavy fire.....

The latest ZDF poll shows that 65pc of Germans think the euro is damaging, and 49pc think Germany would be better outside the EU.
The Cyprus bank bailout scandal is especially noteworthy because it's common knowledge that Cyprus banks were controlled and operated by Russian oligarchs who were engaged in laundering money and other nefarious activities.  Wolf Richter at summed up the Cyprus bank situation best, here
Timing couldn’t have been worse. Or more opportune. A “secret” report by the German version of the CIA, the Bundesnachrichtendienst (BND), bubbled to the surface, asserting that the pending bailout of Cyprus would use the money of taxpayers in other countries, particularly in Germany, to bail out mostly rich Russians who have over the years deposited their “black money” in Cypriot banks that are now collapsing.

Not that the bailout of this tiny speck of land with 840,000 people isn’t in enough trouble. Admitted into the Eurozone in 2008, Cyprus veered towards bankruptcy in 2011 but was temporarily bailed out last November by a €2.5 billion loan from Russia. That money didn’t last long. In June, it asked the Troika, the austerity gang from the EU, the ECB, and the IMF, for a full-fledged bailout. So Troika inspectors have been combing through the financial rubble to determine a bailout amount and needed structural reforms.
Bailing out their poor and unfortunate socialist European neighbors was one thing but the Germans are justifiably incensed over being faced with the horror of bailing out rich Russian oligarchs.  While the well publicized travails of Greece are common knowledge, no one was really all that worried because Greece only represents 1.9% of total EU GDP.  Cyrus is even far less economically significant than Greece with Cyprus GDP representing a very puny .10% of EU GDP.  Why the rush to bailout Cyprus banks with the hard earned money of ordinary Europeans?  It's a valid question.  The banksters are a crime syndicate brotherhood and they absolutely rule the world.

Meanwhile, the Troika - European Central Bank (ECB), European Commission (EC) and the International Monetary Fund (IMF) - remains committed to bailing out every thieving bank for all eternity and the Troika doesn't care if the economies of every European nation collapse into ruin.  The Troika is the guardian of the rich and their financial interests, just as its American partners, the Federal Reserve and the US government, are also the guardian of the rich and powerful, wherever they are.

Americans tend to totally ignore what is happening in Europe because they are sufficiently delusional to believe that whatever happens across the pond would never happen in America.  The general perception of the average American is that their government and banksters are honest and decent folks who would never allow such shenanigans to occur in America.  Americans just fail to grasp the stone cold reality that their government and banksters are indeed partners with the crime syndicate that rules Europe.

What is happening in Europe isn't a benign ripple in the lake effect that will softly reverberate across the big pond known as the Atlantic Ocean.  It will hit America like a tidal wave as the startled and unprepared American people are struck with a lightening bolt and forced to comprehend that the US government, American banks and the Federal Reserve are all critically tethered to the European banks and all central banks.  Europe and the Euro can't fail without bringing America down with it, and most economies of the world for that matter.

As the German people are waking up to their own vulnerability in the extremely volatile and dangerous financial mess that was 100% spawned by central banks and bankster bailouts, they are contemplating their own economic predicament.  Eventually, one does in fact become sufficiently informed and terrified to focus on their own survival.

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