Tuesday 14 August 2012
Eurocrash: problems multiply
Tuesday, 14 August 2012
Much as I would like to ring the changes, the rapid pace of developments
in the eurozone is such that I feel I dare not leave the subject too long,
for fear of missing something in
what is very clearly building up to the end game.
Even then, with the volume of material being produced, I am not even
beginning to cover the territory as much as I would like, and can only hope
to convey les grandes lignes.
However, days after I reported that Germany held the key to the escalating
crisis, it is good to see Reuters trailing in our wake - to say nothing of
the Irish Times - and reporting:
"Euro many fall victim to German internal politics".
The news agency also picks up on the importance of the derogatory
use of the term "liability union", which we noted those days ago, now
telling us that, when a former German finance minister characterises the
eurozone as a Haftungsgemeinschaft -
a community of liabilities - even the most fervent euro supporters might
have pause for thought.
The Germans, however, are showing themselves to be less than enthusiastic
supporters
of the euro and it is quite ironic that, for all the eurosceptic rhetoric from
Britain, the eastern
half of the "motor of integration" looks to be the most likely nemesis of the
project.
form of MP
Thomas Pringle who, last month, had sought and failed to get the Irish
supreme court to
block ratification of the ESM.
Pringle, though, was able to get the case referred to the ECJ and now a
group of Germans,
led by professor Markus Kerber, has filed a constitutional complaint,
including an emergency petition, calling for the constitutional court in
Karlruhe not to deliver a judgement on the ESM
until the ECJ has ruled.
Although the Karlsruhe judgement was expected on 12 September.
Handelsblatt now regards
that date as "untenable", setting back the introduction of the ESM even
further.
Says the paper, the decision of the Federal Constitutional Court is of
crucial importance for the
euro bailout policy. Without the consent of the judge, Germany cannot
its share of the ESM
bailout fund, and will also prevent further ECB bond purchases.
This can only rack up the pressure, which is already reaching intolerable
levels, not least by the news that, as Italian bond yields are soaring, the
investment banking giant Goldman Sachs has almost completely withdrawn
from its involvement in Italian government securities.
biggest problems. Already,
the list is out of date and growing. And there is no end in sight.
UPDATE: Germany's Constitutional Court has stated it will rule on
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