[softy54534]

Germany dubbed 'master of Europe' in euro crisis
Published: 8 Dec 11 15:05 CET
http://www.thelocal.de/money/20111208-39389.html

Germany is emerging as the master of Europe, analysts said on Thursday ahead of a make-or-break summit on the euro – as the European Central Bank (ECB) set the scene by cutting its key interest rates.

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http://www.thelocal.de/politics/20111214-39521.html "For the first time in the history of the EU, Germany is the unquestioned leader, and France is number two," said Charles Grant, of the Centre for European Reform think tank, citing growing inequality ever since the financial crisis struck in 2008. “Regular summits between Angela Merkel and Nicolas Sarkozy maintain the appearance of parity," he said. But citing divergent performance whether in terms of public finances, exports or the spreads on bond markets, France has been "forced" to bow to German leadership on economic policy.

Germany strongly backs the ECB’s refusal so far to simply print enough money to buy up a large part of the mountain of debt that many eurozone countries have amassed. But the ECB's governing council, under intense pressure to do something, reduced eurozone borrowing costs for the second time in two months, cutting the rate for its main refinancing operations by a quarter of a percentage point to 1.00 percent on Thursday.

The euro immediately firmed to $1.3418 from its rate of $1.3380 before the rate decision, which came just hours before Chancellor Angela Merkel was due to meet other European leaders for a crucial summit in Brussels to save the debt-wracked eurozone. Yet the bank also said it was expecting eurozone inflation was 2.7 percent in 2011, way above the ECB's target of close to but just below 2.0 percent.

Merkel said on Thursday she was convinced that Europe would find the right solutions to the debt crisis. "We will find good solutions. I'm convinced that we will find a solution to all these questions," Merkel told a meeting of right-wing European parties in Marseille, admitting that talks would be "difficult" at the EU summit.

"I ask for understanding from those who do not have the euro. We must send a strong signal to the outside. Words alone are not enough, we need more ties, we need treaty changes," she said. The ECB’s interest rate cut came as no surprise to ECB watchers following a similar move last month as the debilitating debt crisis pushes the 17 eurozone countries to the brink of a new recession.

The high stakes for all EU institutions were highlighted by French President Nicolas Sarkozy who said in Paris that the risks of the EU exploding had never been so great. There would be no "second chance" if the summit failed to come up with a convincing solution, he said. With the ECB rate cut widely priced in, the markets are waiting to see what other moves the bank – which many see as the only body able to contain the crisis – will take to shore up the debt-wracked euro.

The crucial question is whether the ECB will see commitments by Germany and France to tighten up eurozone budget discipline as sufficiently convincing to give it extra room for manoeuvre. Under intense pressure to deal with the contagious debt crisis, European governments are moving towards radical changes on the road to fiscal, economic and political union.

In the future, governments that overspend and so increase the risk of market penalties for currency partner governments could be fined or see automatic "corrections" imposed by the European Commission. A so-called "golden rule" obliging governments to fix balanced budgets and bring cumulative debts back within EU thresholds over time means the EU executive would acquire intrusive powers to rewrite national budgets.

The ECB would only increase its purchases of distressed government bonds, particularly Italian debt once it believed rules and policing mechanisms were in place to ensure that national governments tackle their fiscal deficits, said Chris Williamson, director and chief economist of Markit in London. An announcement by international credit rating agency Standard & Poor's putting the sovereign debt of the entire 27-nation on EU on downgrade watch has ramped up the pressure on Europe's leaders to act.

"The entire world is watching. We must do everything" to save the euro, European Commission chief Jose Manuel Barroso told reporters in the French port city of Marseille. "It is extremely important that we all together, all the EU, show that the euro is irreversible."

S&P's chief economist for Europe Jean-Michel Six insisted the agency was not working on the basis of an outlook that the single currency area would break up. The ECB has played fire-fighter to a substantial extent throughout the long and debilitating crisis. But its officials insist that such a role is only temporary and it is ultimately up to governments to get their finances in order.

[NeroASERCH]

There was recently quite a hub bub about our prime minister Mr Cameron using this countries veto to stop the Mercozys from imposing a financial transaction tax on the City of London. There was much talk of Mr Cameron bravely defending British interests.

All Mr Cameron was defending were the same financial institutions who just happen to be the largest contributors to the Tory party coffers never mind the fact that it was their recklessness that got us into this mess in the first place.

What he did achieve though was to neffectively distract attention away from the essential truth that Mrs Merkel and Mr Sarkozy between them havnt a clue how to avert this disaster apart from borrowing even more billions which they are fixated on as a solution to this DEBT crisis..

The truth is the Euro has had it and its going down like the Titanic. The watertight doors are Greece Italy Spain etc etc and they are debt flooded and shes going down by the head. Whatever decisions the UK may not be party to by the Mercozys is not going to maKE A JOT OF DIFFERENCE TO THAT as whaever they try is like rearranging the deckchairs before she slips beneath the icy financial waters.

[9mm_fan]

Germany is the master of Europe without firing a shot. France, as in the days of Vichy, is hanging onto Germany's coattails. I have to agree the Euro is foundering and they, the Euro darlings, are short of lifeboats... amongst a few other odds and sods. Cameron, what can I say? The man, as well as those like Clegg, haven't a clue... Miliband, well he is a study in futility: then again, aren't they all.

Unfortunately, these dullards will not suffer as the people of the world shall, when their house of cards tumbles. I suspect it has already... only cello-tape holds it together, momentarily. One has to wonder when, likely never, leadership comes to the realisation that a cut-and-paste economy will never take the economy off life-support.

[Ifroham4]

Here in Ulster we are casigated for our outdated sense of loyalty to a United Kingdom which has allowed itself to be taken over by the politically correct elite. They have fostered a ME ME ME culture where its the duty of every ner do well to think that they are the only one that matters however outlandish their desires.

The state will always be there with a bottomless purse to fund this driven by a greedy liberal legal industry promoting spurious illogical euman rights cases plus ingraining a culture of state handouts. Many find they cant afford to work for a living because they get more from the state not to, which has attracted the legions of so called illegal immigrants and bogus assylum seekers who truth be known are really dole seekers. Why else did they pass through every other country in Europe until they reached the UK?

Once here the ambulance chasing legal eagles latch onto theses people and soak up vast amounts of taxpayer funded legal aid which means even murderers pedophiles and fraudsters can spend literally decades costing us millions each, establishing their rights to remain here. This countries like a lobster pot, once they get here however dubiously, theres no way under European law we can get rid of them while their countries of origin breathe a massive sigh of relief.

Too many of uur young people dont sees much point in working for a living any more there heads are filled with the ridulous notions of instant celebrity or victimhood where the state owes them a living.

Until we get back to common sense rules in our legal system and the lost values of pulling yourself up by your boot straps because only hard work and self reliance are the way to succeed then I dont see a very good future ahead for our blighted nation

RANT OVER!!!

[Slonopotam845]

You hit the problems there right on the noggin'! I don't get any jollies agreeing with you... it is simply a fact. Canada is usually a decade behind the UK - It's only a matter of time we, too, are cursed with the same blight. Not that we don't have the gimme, gimme, element here... they are a dime-a-dozen. It's difficult to have any sense of positivity but we must continue to struggle.