Sure Is Cold In Here

Cold

The issues at stake are not trivial ones. At the core of the Franco-German conflict is no less a matter than the question of how Europe can shake off the current crisis. Merkel is convinced this can only be achieved by implementing reforms — austerity, liberalization of the labor market and restructuring of social welfare systems.

But Hollande is unwilling to let Germany impose its model on France. He fears the European recession will only worsen if Berlin succeeds in implementing its austerity plans.

Even in the euro crisis, Germany is reluctant to be seen as sole leader. It badly needs a French economic revival to have a plausible partner at the top again.

“This is why, ultimately, it does not matter whether they like each other—that has not been the case for years.”

Germans Tired Of Being Cast As The Euro Zone’s Scapegoats

But once they take a nap and rest a little bit, they won’t be so tired anymore.

Scapegoats

Sometimes Germany was too weak, sometimes too strong. Or, as Henry Kissinger, a former American secretary of state, put it, referring to Germany just after unification in 1871, it was “too big for Europe, but too small for the world”. Today, Mr Simms (Cambridge University) argues, “it sits uneasily at the heart of an EU that was conceived largely to constrain German power but which has served instead to increase it, and whose design flaws have unintentionally deprived many other Europeans of sovereignty.”

The question is whether Germany can use its power by unapologetically leading. Given Germany’s past, its political culture militates against even trying.

“It’s nice to go to a conference of ‘young leaders’, but you don’t want a conference of ‘junge Führer’.”

Pope Latest Victim In Never-Ending German Plagiarism Scandal(s)

Pope Benedict XVI shocked the world by resigning today following allegations in Berlin that his entire bibliography had been plagiarized.

Pope

This is now the four-hundred-and-forty-seventh time in the past two years that a high-ranking German politician and/or Pope has been forced to quit over accusations of cheating on doctoral dissertations and/or religious meditations.

“Wow. We’ve had ministers resign here right and left, like freakin’ flies,” one source near Chancellor Angela Merkel’s government said. “But a Pope? Holy Moley!”

“I’ve accepted his resignation heavy-heartedly,” Ms. Merkel is said to have said.

More Godwin’s Law In Action

And it’s particularly popular with Germans, for some strange reason: “In other words, Godwin observed that, given enough time, in any online discussion—regardless of topic or scope—someone inevitably makes a comparison to Hitler or the Nazis.”

Hitler or what?

OK, technically this wasn’t online, but the latest unnecessary comparison to Hitler came from a certain Andreas Köhler, head of a German doctor lobby group here (die Kassenärztliche Bundesvereinigung).

“Julius Caesar, Charlemagne, Napoleon, Adolf Hitler, Angela Merkel – the list of leaders is very long when it comes to those who have tried to unite Europe. And these attempts have always failed because no one can imagine living together in one and the same European house.”

Uh, is the doctor in?

Ein KBV-Sprecher sagte der dpa, aus der rein internen Feier seien Sätze ohne weiteren Zusammenhang nach außen gelangt.

Prioritäten Setzen

You know, to prioritize?

The refocusing of U.S. attention on Asia that marked Mr. Obama’s first term had already provoked much soul-searching among Germans about the relevance of the trans-Atlantic ties that for decades defined their existence.

The failure to announce any early state visit to Germany is still perceived in Berlin as a snub, and has helped fuel the urban legend that Mr. Obama has not forgiven Ms. Merkel for refusing to let him speak as a senator before the city’s heavily symbolic Brandenburg Gate landmark.

“Berlin is not only a place of German history, but of American history. It is the city where the Americans twice triumphed over evil, first the Nazis and then the Communists.”

Merkozy This Is Not

How about Hollmerk?

The two capitals (Berlin and Paris) always begin from very different positions, whether there is a socialist or conservative administration in Paris.

The concern in Berlin is over what is seen as the absence of a clear strategy on eurozone reform from the new French government. There is a deep suspicion that France is happy to have a weaker euro, higher inflation, and a looser monetary policy than Germany.

Mr Hollande’s refusal to incorporate the recent “fiscal compact” into the French constitution is one reason that Germany is now pushing for every country to sign a bilateral budget “contract” with the European Commission, that can be enforced by a powerful budget commissar… But Paris regards Ms Merkel as being overly focused on building deeper European political integration in a way that ignores deep-seated reticence in France reflected in the 2005 referendum defeat of the then-planned EU constitution. 

Well Banks Are Bad, Aren’t They?

So what’s the big deal? Now all of ze Europe officially has a bad bank, too.

It’s called the ECB and is the “bad bank for all the junk debt of Europe.”

“Blank cheque for the indebted states,” was the headline of the top-selling Bild newspaper, a harsh, populist critic of the bailouts for Greece and other struggling euro zone nations, adding that the ECB move could render the euro “kaput”.

“Financial markets cheer the death of the Bundesbank.”

So Much For That Shootout

I still don’t know who Gary Cooper was here, but Mario Draghi just went from “I will do whatever it takes to preserve the euro” (and buy up Spanish and Italian bonds) to “the ECB may consider” doing so at a later date.

Needless to say, the markets were not amused. Cherchez la femme, I’d say (and it ain’t Grace Kelly).

What’s the hold up? Germany, perhaps. During a press conference afterwards, ECB vice-president Vítor Constâncio noted that only one member of the ECB was adamantly opposed to bond purchases. This seems to be a reference to Germany’s Bundesbank, which had vigorously opposed a central-bank bailout of Spain and Italy. And even though the Bundesbank doesn’t have a direct veto over ECB actions, it seems Germany, as the richest country in the euro zone, still has plenty of sway.

“For all the criticism of Merkel, she distinguishes herself from politicians on both sides of the Atlantic in that she has a plan.”

Bonds, German Bonds

That’s the thing about a crisis: There’s always a winner, too. Take the euro crises, for instance. And the demand for German bonds these days.

Demand for German bonds, seen as the safest haven in the euro zone, has pushed Berlin’s borrowing costs so low that some investors are effectively paying Germany for the privilege of lending it money.

Damn. This gives German bondage a whole new meaning.

Low interest rates on German bonds are translating into billions in savings. Now economists have calculated that the country should be able to balance its budget by next year — something that is likely to increase criticism of Germany’s crisis management.

…The perception that Germany is benefiting financially from the crisis while imposing strict austerity measures on countries in southern Europe is unlikely to win many friends for Chancellor Angela Merkel, who is already highly unpopular in countries such as Greece.

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