so does Germany have it's face buried in the sand on inflationary woes whilst everything else is toppling around the Euro?

 NoEnzLefttoSplit wrote: 


My iPad ones, obviously.

 MrsHobieJoe wrote:
 
which fingers did you cross?

 mzpro5 wrote: 


Tbh there is little point in overanalysing the errors at this point. There will be nasty repercussions around the world if things go pop ( there are already nasty results, it will get a lot worse). People like the uk (in the eu but not in the euro) and the us ( plenty of "safe" lending to the eurozone and everyone else who is tangled up with such a huge trading bloc will be affected.

The problem that you mention was identified at the outset, unfortunately the fix wasn't strong enough and Greece is well known for having faked their figures.

Still too I'll to debate ,uch on this one at the mo, fingers crossed for a recovery tomorrow!

The combination of a centralized currency and allowing individual countries to in essence set their own separate financial policy made sure this was doomed to fail.

 oldslabsides wrote: 


I may be being bit of a noodle here but I don't see where you're getting to wealth redistribution. If nothing else this is at a government level not a personal one. I did read a krugman article the other day that suggested that a lot of USA commentary has related the problems with the euro with socialism.

 MrsHobieJoe wrote: 
There is an element/group in the equation that wants the wealth redistributed. They want all nations/people brought to the lowest common denominator. They want not just European union, but world union. They know that financial equalization is required to accomplish that.

/>Interesting article in the guardian, my only comment is that just because the ECB is absolutely not designed to be used as a lender of last resort, doesn't mean that it won't be! The picture seems to have been lost when I pasted so I'd better say that the Person being quoted at the start of the article is Mervyn King, governor of theBank of England:








Sir Mervyn King at a press conference on Wednesday: 'This phrase "lender of last resort" has been bandied around by people who, it seems to me, have no idea what lender of last resort actually means. Photograph: PA


Central banker agrees with central banker is not the most startling development in the eurozone debt crisis. But Sir Mervyn King's forceful expression of sympathy on Wednesday with his counterparts at the European Central Bank in Frankfurt is important for its clarity.





It is a statement of why there is no easy solution to the crisis that involves the ECB simply cranking up its printing presses and lending to Italy, Spain and whoever else needs a helping hand. The ECB, under its mandate, is simply not allowed to lend to eurozone governments who are struggling to access funds at reasonable rates – and there are good reasons for that arrangement.





Here are the relevant remarks by the governor of the Bank of England at this morning's press conference.





This phrase 'lender of last resort' has been bandied around by people who, it seems to me, have no idea what lender of last resort actually means, to be perfectly honest. It is very clear from its origin that lender of last resort by a central bank is intended to be lending to individual banking institutions and to institutions that are clearly regarded as solvent. And it is done against good collateral, and at a penalty rate. That's what lender of last resort means.





That is a million miles away from the ECB buying sovereign debt of national countries, which is used and seen as a mechanism for financing the current-account deficit of those countries, which inevitably, if things go wrong, will create liabilities for the surplus countries. In other words, it would be a mechanism of transfers from the surplus to the deficit countries. That's why the European Central Bank feels, and with total justification, that it is not the job of a central bank to do something which a government could perfectly well do itself but doesn't particularly want to admit to doing.













I think it's very important to recognise that there are circumstances where governments will try and put pressure on central banks to do things that they would like central banks to do in order to avoid their having to own up to the actions that they actually would like someone else to carry out. So I have every sympathy with the European Central Bank in this predicament ...





The only circumstance in which looking at the data for the euro area as a whole has merit is in realising that actually the euro area does have the resources, if you were to regard it as a single country, to make appropriate transfers within itself. It doesn't actually need transfers from the rest of the world. But the whole issue is, do they wish to make transfers within the euro area or not? That is not something that a central bank can decide for itself. It is something that only the governments of the euro area can come to a conclusion on. And that is the big challenge that they face.





King's remarks are much clearer than anything that has been said by Mario Draghi, or his predecessor at the ECB, Jean-Claude Trichet. That's perhaps because the ECB itself has been blurring the rules – for example, by accepting Greek debt on its balance sheet even though the paper is regarded as junk by the ratings agencies.





But ignore that dubious Greek diversion. The big point remains: if the ECB were to subscribe for large quantities of new Italian and Spanish debt it would be accepting a risk that ultimately falls on all governments in the eurozone, since they're people who stand behind the ECB itself. If the new Italian and Spanish bonds on the ECB's books were to turn rotten, the losses would fall on the rest of the eurozone. So it's best to be explicit about that credit risk, rather than to pretend it can be lost in the wash of everyday central banking activity.





Put another way, the essential problem is that the eurozone doesn't have a single government with a single balance sheet. If it did, the option of printing a heap of cash to erode the value of euro-denominated sovereign debts (at the expense of rich northern European countries) would exist. But it is not allowed. Them's the rules in the eurozone: members aren't liable for each others' debts.





So, as ever, it is back to square one. If the eurozone won't bail out itself, there's not much point in hoping that the Chinese will: after all, as King said, the resources exist within the currency union. Or, as Mike Riddell at M&G puts it: "The northern Europeans just have to accept that bailing out the crisis-hit eurozone countries is going to be very expensive, and that is something that northern European politicians are refusing to face up to as it will understandably be extremely unpopular with their electorate."





No wonder, one might conclude, the ECB's current interventions in the bond markets of Italy and Spain are not holding down yields. These purchases are allowed under the Securities Market Programme, which is designed to support monetary policy. But it's perfectly plain that sums being deployed – up to €10bn a week since August – are trifling when set against the size of the debt overhang.





One way or another, somebody will have to accept some losses, or put up some cash that could potentially be lost, if the single currency is to stay intact.

 romeotuma wrote: 


Can't believe this is still running, Germany needs to get on and act, Greece probably will have to exit the euro, talk about fiddling while Rome burns.

Europe Examines Ways to Quell Its Debt Crisis

Fears over the European financial crisis began to spread Tuesday from the weaker countries to healthier ones, including Italy and Belgium, and even much stronger Germany, spurring a stepped up search for a solution to the economic problems putting a strain on Europe's decade-old monetary union.

It's quite refreshing to see that general elections in a big democracy can be held off without a giant media frenzy, trillions of dollars being hurled around and mud being slung from all sides. Headlines hardly made it across the border to Switzerland and the one and only TV debate between the two main candidates was appropriately titled 'yes we gähn!' (yes we yawn!) by a large German newspaper.

 MrsHobieJoe wrote: 
Very uncharacteristic of me, but I haven't cared too much for this election at all.

It was clear before it even started that the major parties (in a "grand coalition") would invariably lose out to the minor parties. It is a little surprising that this swung more against the SPD (labour party) than the CDU (center right) who now have a majority with the FDP (neo-conservatives).

So the traditional left-wing party is in a state of crisis trying to analyze what went wrong but if you take the bigger picture the left did not actually do too badly. The trouble in Germany is that the radical left (actually not at all radical but they grew out of the communist party of East Germany) is still not acceptable to anybody (not even the SPD) and is off limits for building a coalition, so that really weakens the SPD. Not their fault.

Personally, I think it is still all a bit ho hum. I'll be interested to see how the neo cons want to introduce tax cuts when the budget is looking so disastrous in light of the recent crisis. I think they will have their hands pretty firmly tied. Personally I can't say I wouldn't say no to a tax cut.

In the distant future I see the greens slowly rising to take leadership of the left wing and possibly extending a welcome to the Linke (former GDR communists) to form a government one day. Might take a while though.

There, does that sound boring enough for you?

What's the take in Germany on the election result noenz (or anyone else who's interested)?  Not exactly a shock surprise I would assume.  We've been following a bit on Radio4 over the last couple of weeks but it's been a touch of a