from TestosteronePit Website
Everyone learned a lesson from the “bail-in” of the Cypriot banks:
Even brand-new Finance Minister Michael Sarris who got axed because he’d been chairman of Laiki when this was going on.
And German politicians learned a lesson too: that it worked!
The chairman of the finance committee in the German Parliament and member of the CSU, Chancellor Angela Merkel’s coalition partner, called for deeper collaboration of the "triple-A countries" in the Eurozone,
There are still five in that Euro triple-A club:
It would be in the best interest of Luxembourg as major financial center, he added. A reference to Luxembourg’s precarious status, as Cyprus had learned, of being a tiny country with outsized banks that it could not bail out by itself.
To protect the Euro, the alliance of the triple-A countries must be united firmly against large Euro countries like Italy and France, he said.
...renewed doubts about Greece, and the failure of the French government in its stability policies.
Exactly what French President François Hollande needs: the Euro triple-A club breathing down his neck. He's already in trouble at home. To reverse the slide, he got on state-owned France 2 TV last Thursday to speak to the French people so that they could see how his sincerity, wisdom, and economic policies would stop the country from sinking ever deeper into a quagmire.
And a quagmire it is:
He has tweaked some policy measures here and there.
And he dug up a new version of the 75% income-tax bracket that had been squashed by the Constitutional Court. But Jérôme Cahuzac, the Budget Minister who’d tried to get the first version through the system, went up in flames over allegations of tax fraud and “tax fraud laundering.”
Now the people have had it. After the TV appearance, his approval rating, ten months into his term, plummeted another 6 points to 31%, a low that scandal-plagued Nicolas Sarkozy took four years to reach.
And only 27% approved of his economic policies.
France was suffering the consequences of the “socialist experiments” of its government and was becoming less and less competitive, explained Hans Michelbach.
He emphasized that France would remain an important partner of Germany. He wasn’t kidding: France buys 10% of Germany’s exports and is crucial to the German economy.
But if France didn’t change course, he said, that could become a “serious problem” for the Eurozone. As opposed to the mere hiccups of Cyprus or Greece.
More banks and more countries will require bailouts:
...are on the list.
And no one wants to see France on that list. Even Italy is too large to get bailed out by other countries - though it’s rich enough to bail itself out, à la Cyprus [A “Politically Explosive” Secret - Italians Are Over Twice As Wealthy As Germans].
But in Germany, a revolt against these save-the-Euro bailouts has been brewing for a while.
With elections in September, it’s taking on volume and voices, and the structure of a political party, the Alternative for Germany, not unpalatable radicals but the educated bourgeoisie, and they want to stop the bailouts and dump the Euro.
The government is feeling the heat. No one can afford to lose votes. Michelbach’s triple-A club, a line of demarcation in the Eurozone, is one of the reactions. Merkel might benefit from it in the elections. The other four countries might find if appealing, though it will be of dubious appeal in the rest of the Eurozone.
But if efforts fail to fix the Eurozone’s problems - and the Eurozone lumbering that way - a tightly knit triple-A club could weather the storm together, more stable and more unified than the Eurozone ever was. And Michelbach had just floated a version of that idea.
Decades of economic mismanagement, political ineptitude, corruption, and financial fraud in Latin America - overseen by the IMF, now a protagonist in Europe’s Troika (European Union, European Central Bank, and International Monetary Fund) - reached their nadir in the Mexican Tequila Crisis.
It should have served as a portent of the financial storms now buffeting Europe...