Germans unhappy with the Euro

[Nitrox]

Can't say I blame them, they're paying for freeloaders. Sounds vaguely familiar...

 

GISELA and Susi, thirtysomething civil service secretaries, were shivering over their sausages in what the tabloids labelled the “most miserable May of the millennium” and planning their summer holidays. “I know where I’m not going,” one of them said. “The hotels, service and food aren’t as good as Turkey but the prices are as high as Italy!”

 

As Berliners bravely sat on the banks of the River Spree in unseasonably cold weather for the Ascension Day holiday that traditionally marks the start of summer, they had no doubt that the cold wind was blowing from the sunny south: Greece in particular.

 

The multi-billion-euro payout for Greece, followed by an even more expensive rescue package for the threatened single currency, has created the greatest political climate change in a generation.

 

Suddenly Germans are asking questions about the European project that has been the bedrock of their politics for 60 years, leaving Angela Merkel, the chancellor, under fire from the electorate, the opposition and her own party.

 

It took a stand-up display of table-banging aggression from President Nicolas Sarkozy and an intervention on the telephone from President Barack Obama to get Merkel to agree to the euro package.

 

“We foot the bill for EU disaster,” screamed a headline in Bild, the tabloid newspaper. Christoph Schmidt, a government economist, responded by warning: “Germany cannot become Europe’s paymaster.”

 

The tension between Germany and France threatened to spill over at a Brussels summit last weekend when Merkel and Sarkozy had a furious row. According to observers, it ended with Sarkozy threatening to leave the euro.

 

“It was a stand-up argument,” an official told El Pais, the Spanish newspaper. Sarkozy, furious at Merkel’s reluctance to sign up to a safety net of €750 billion (£644 billion), was shouting and bawling at Merkel and smashed his fist on the table. “It was Sarkozy on steroids,” one witness said.

 

Dubbed “our Iron Lady” — or just “Mutti” (Mummy) within the Christian Democratic Union (CDU) that she dominates — Merkel returned to Germany accused of having given too much, too late.

 

Her timing was also poor. The euro talks, combined with the Greek bailout, led to a CDU defeat in North Rhine-Westphalia’s state election last weekend and with it the loss of her majority in the upper house.

 

The stakes could scarcely be higher. “If the euro fails, it is not only the currency that fails,” Merkel warned last week. “Then Europe fails. The idea of European unity fails.”

 

Sarkozy’s petulant outburst won the day — Merkel was forced to back down on the rescue — but in the longer term it may undermine his objective of a more closely integrated Europe.

 

There is now a pervasive awareness in Germany that the post-war consensus of subsuming its national identity — and national self-interest — in the “common European house” no longer gets a popular rubber stamp.

 

“We give millions to countries where they have big annual pay rises, perks for civil servants and soaring pensions. I’ll have to work to 67 for a pension that might not be enough,” complained Ulrike Daunheim, a 38-year-old shop assistant and Bild reader.

 

“Greece has no industry worthy of the name, makes no products with prospects on a global scale and carries out no research to discover any,” was the verdict of the left-liberal Der Spiegel news magazine.

 

The contrast is vividly demonstrated by the Berlin Automobilforum on Unter den Linden showcasing the best of Volkswagen, including Skoda, Seat, Bentley and Bugatti — a pan-European empire owned and run from Germany.

 

Part of the public outrage over Greece comes from the shock felt over its financial duplicity in a society based on trust and honesty: Germans face no barriers on tubes or trains, while soft drinks and beer are sold from open fridges on the street into the small hours.

 

This is not to say that German businessmen are incapable of adapting to local conditions. Prosecutors are examining allegations of bribes paid to Greek officials to secure contracts for the sale of submarines, tanks and equipment that got the Athens underground railway running for the 2004 Olympics.

 

The paradox is that if German companies were overpaid at the expense of the Greek taxpayer, it is now German taxpayers who have had the bill passed on to them. Germany’s share of the euro bailout package is €120 billion, but it is already expected to rise by a further €25 billion.

 

The greatest fear in German minds is that by agreeing to buy bonds issued by countries such as Greece, which have been reduced to “junk” status, the European Central Bank (ECB) will weaken the euro and risk rampant inflation.

 

That is a word that strikes a chill in the heart of every citizen of a nation that has twice in the past 100 years seen its money made worthless and its savings evaporate, most notably during the 1920s.

 

During a 16-way conference call of ECB board members that had to endorse Merkel’s and Sarkozy’s agreement, Axel Weber, the Bundesbank president, pointed out it was mostly German money and came close to slamming down the telephone on his colleagues.

 

The markets were boosted only temporarily. Josef Ackermann, chairman of Deutsche Bank, has warned that Greeks may not be able to meet their debts no matter how much more they are helped.

 

Hardly surprising, German critics say, that Sarkozy can claim the deal as a “95% French idea”, given the role of his compatriots Jean-Claude Trichet, the ECB president, and Dominique Strauss-Kahn, head of the International Monetary Fund.

 

Merkel is being urged to insist that the “stability pact” is hedged with strict controls on national economic policies. By the end of last week she was even coming round to a suggestion by Olli Rehn, the Finnish EU commissioner, that national budgets should be submitted to Brussels first to keep an eye out for further Greek-style accounting.

 

Ulrike Guérot, head of the European Council on Foreign Relations think tank, said: “Germany has provided the oil that greased Europe. If we don’t want to do that any more, we need to say so. But that means we no longer want to see a Europeanised Germany, but a German-style Europe.”

 

This would mean a halt to European Union expansion — and certainly to eurozone expansion to dodgy economies. Friday’s Frankfurter Allgemeine Zeitung, the epitome of conservative economic orthodoxy, suggested that if others do not toe the line the euro could retrench to a few economically compatible countries, or else Germany should leave. That would finish the euro and make Sarkozy’s threat to pull out if he did not get his way look a bad joke.

 

The creation of the euro, within a decade of East Germans being given the coveted western D-mark, was sold as a “thank you” for German unification: in effect extending the stable German currency to the rest of the continent.

 

The question being asked this weekend is whether or not Merkel is standing up strongly enough for Germany’s own interests.

 

Her allies in the pro-business Free Democratic party (FDP) are furious that their promise to cut taxes may be ditched and say they may rewrite their coalition agreement. Otto Solms, the party’s finance expert, has threatened revolt against Merkel’s support for a financial transaction tax.

 

Within her own party, Roland Koch, prime minister of the state of Hesse, whose economy is almost as big as that of Greece, says he will be forced to shelve planned free childcare for the under-threes.

 

The Christian Social Union (CSU), Merkel’s Bavarian sister party, is also up in arms. Christine Haderthauer, the state’s social affairs minister, has accused Merkel of “acting like an arsonist and thinking like a dinosaur”. Horst Seehofer, the CSU leader, has complained he heard about the euro rescue pact “only on my car radio”.

 

The argument is about the future of the European idea. Sarkozy felt Merkel was wrong to leave behind the euro crisis to attend a VE Day anniversary ceremony in Moscow. For Merkel that was missing the point: the European project has been about superseding the national rivalries that lead to war.

 

For 60 years Germans, aware of their own past, were happy to pay the pipers of peace.

 

The mantra of Britain, which always argued that the EU should be expanded without economic integration, was “wider, not deeper”. This may have allowed countries such as Greece, with a different economic culture, to be embraced all the more readily.

 

German politicians believed the euro meant stronger economic bonds that would ultimately imply political union — and that the dilution of national sovereignty would be driven by the bigger partners.

 

That is now in doubt. In the midst of the crisis Wolfgang Schäuble, Merkel’s finance minister, was taken to hospital after suffering an allergic reaction to medication.

 

The same fate may yet await the European project.

 

Peter Millar’s book 1989:

 

The Berlin Wall (My part in its downfall) is published by Arcadia, £11.99

 

http://www.timesonline.co.uk/tol/news/world/europe/article7127621.ece

 

 

[el jefe]

you're link is quoting an article from the german newspaper "das bild" -- their version of the national enquirer. springerverlag is somewhere far to the right of fox news.

[Stonehead]

Is it true? The slaves becoming the master? The master becoming the slave?

 

...Peace and war as the bookends of history and everything else falls in between where the stories of markets and money reside?

Debt: The first five thousand years

 

Or, are you saying that the only story here is the one concerning responsibility and irresponsibility?

[billcoe]

I can totally relate. This is what happens the night after a drunken spree, you wake up with a mean ugly bitch clutching $200 of yours in her fist and she is sleeping on your arm and you're all like OMG!?

 

Only in this case, it's a German waking up with a Greek woman of course.

[tvashtarkatena]

The only clean part of her are her nipples where you've licked the dirt off.

[j_b]

you're link is quoting an article from the german newspaper "das bild" -- their version of the national enquirer. springerverlag is somewhere far to the right of fox news.

 

Right, and the Times of London is a Murdock rag (FOX's owner) that is stridently anti-Euro.

 

Always trust the leeches to accuse others of being freeloaders.

[j_b]

I can totally relate. This is what happens the night after a drunken spree, you wake up with a mean ugly bitch clutching $200 of yours in her fist and she is sleeping on your arm and you're all like OMG!?

 

Only in this case, it's a German waking up with a Greek woman of course.

 

As if you knew jackshit about the situation in Greece; yet, here you are, not wasting a moment to pontificate and accuse an entire people of wrong doing. Shame on you.

[rob]

To be fair, Germans aren't really happy about anything. Except maybe clucking.

[j_b]

"The irony here is that both sets of actions are self destructive, and both are rooted in the same reflex. In each case, a social compact under strain has been pushed to its breaking point by the crisis aftermath. You can argue that the Greek arrangements were ripe for breakdown, given the country’s chronic fiscal deficits, accommodative posture towards wealthy tax evaders, and acceptance of bribery as a way of doing business. But as dysfunctional as it looks, it functioned nevertheless. And now that it is breaking down, many citizens are striking out at the parties they think have sold them out: the banks and government officials. This too has a certain logic. Many studies have found people will spend time and effort to punish cheaters, even if they wind up worse off as a result (I’m not saying the violence is effective or aimed at the right targets, merely that this kind of reaction isn’t surprising).

 

Although the reaction of the German citizenry looks more reasoned, it too ultimately is self destructive. Even though the Greek model was (arguably) based on corruption and the German on hard work and thrift, the German was ever bit as unsustainable precisely because it was overly export dependent. That meant it required countries that would go into debt to buy its exports. Germany and Greece are not independent phenomena; they are merely two sides of the same coin. And many Germans seem as keen to punish profligate debtors as Greeks are to punish the banks and officials they think sold them out."

 

http://www.roubini.com/euro-monitor/258834/greece__germany__and_the_dangers_of_beggar_thy_neighbor

[billcoe]

As if you knew jackshit about the situation in Greece; yet, here you are, not wasting a moment to pontificate and accuse an entire people of wrong doing. Shame on you.

 

Well - you don't appear to know jackshit about jack shit but that hasn't stopped you from flapping your lips criticizing everyone in an endless manner on all sorts of things you're totally ignorant about either. Shame on you. BTW, the story is about Germany, not Greece, idiot.

 

How does my jb style reply strike ya? Sucks doesn't it?

 

yes it does yes it does.

 

You're the lil one in this picture aren't ya you jackbooted regressive?

[j_b]

Are you saying you didn't slam the Greeks like all the others conservative nitwits? you could have fooled me, jackass. You don't even have the courage to acknowledge what you said a few hours earlier, it is therefore no surprise you won't acknowledge your support for the conservative policies that took us the brink

 

 

[j_b]

And of course, per usual, no actual argument that is germane to the topic. Ad-hominems galore, that's about all you can manage.

[Peter_Puget]

Come on J_B let's just hug...I am sure it will help you feel better. my arms are open wide.......

[j_b]

A little fact for the know nothing demagogues who like to slam the Greeks when they are down: on average Greek retirees, workers and employees declare nearly twice as much income as Greece's professional class. Apparently, until the ship went down, nobody thought that was odd.

[olyclimber]

its all greek to me

[Nitrox]

A little fact for the know nothing demagogues who like to slam the Greeks when they are down: on average Greek retirees, workers and employees declare nearly twice as much income as Greece's professional class. Apparently, until the ship went down, nobody thought that was odd.

 

Of course its odd, the producers in Greece are tired of paying for the non producers. Tax evasion has become a national past time in Greece. Its the same as the Germans not wanting to give Euro's to Greeks.

 

 

 

 

[j_b]

If we had followed your rotten logic, red states would have seen none of the gravy train that allowed them to stay afloat for the past several decades. The Germans are only finally figuring out what is the role of a central bank during economic downturns: bailing out those that need to be bailed out.

[billcoe]

Are you saying you didn't slam the Greeks like all the others conservative nitwits? you could have fooled me, jackass. You don't even have the courage to acknowledge what you said a few hours earlier, it is therefore no surprise you won't acknowledge your support for the conservative policies that took us the brink

 

Look nitwit, I'll talk slow, I'm saying that this thread is about Germany and you don't know jack shit about jack or shit "jackass". I only count my blessings that idiots like you are not in charge of this country or we'd be swimming in shit like Greece.

[j_b]

and, one more fact-free post from the service jackass.

[Nitrox]

Nope, the difference is the US is largely made up of non government employees that pay a small percentage of taxes. Greece on the other hand is made up largely of government employees and the non government employees pay a very large percentage of tax. The producing citizens are tired of paying for the overpaid government employees (who get tax breaks) and when the tax collector shows up it costs less to pay bribes than to pay the actual taxes. But, since Greece really has very little industry outside of government employees they are in a lot of trouble because they have nothing to sell or borrow against. They are left begging.

 

The German public realizes they are a sovereign nation and do not want to foot the bill for Greece. I'm sure Greece will get the bailout but only because of how greatly their bankruptcy will affect the rest of the EU.

 

 

[Nitrox]

Look nitwit, I'll talk slow, I'm saying that this thread is about Germany and you don't know jack shit about jack or shit "jackass". I only count my blessings that idiots like you are not in charge of this country or we'd be swimming in shit like Greece.

 

AHEM...

 

 

[j_b]

Quit regurgitating the made up drivel you hear on Glenn Beck's show. Not only does it make you look like a retard, but nobody is buying it.

[KaskadskyjKozak]

Quit regurgitating the made up drivel you hear on Glenn Beck's show. Not only does it make you look like a retard, but nobody is buying it you regressive knuckledragging Neanderthal corporate tool, and oil-company shill.

 

 

[Nitrox]

Quit regurgitating the made up drivel you hear on Glenn Beck's show. Not only does it make you look like a retard, but nobody is buying it.

 

Hypocrite?

And of course, per usual, no actual argument that is germane to the topic. Ad-hominems galore, that's about all you can manage.

 

 

The Greek economy

Greece is a developed country, with a high standard of living and "very high" Human Development Index, ranking 25th in the world in 2007,[13] and 22nd on The Economist's 2005 worldwide quality-of-life index.[5] According to Eurostat data, GDP per inhabitant in purchasing power standards (PPS) stood at 95 per cent of the EU average in 2008.[14] Greece's main industries are tourism, shipping, industrial products, food and tobacco processing, textiles, chemicals, metal products, mining and petroleum. Greece's GDP growth has also, as an average, since the early 1990s been higher than the EU average. However, the Greek economy also faces significant problems, including rising unemployment levels, inefficient bureaucracy, tax evasion and corruption.[15][16]

In 2009, Greece had the EU's second lowest Index of Economic Freedom (after Poland), ranking 81st in the world.[17] The country suffers from high levels of political and economic corruption and low global competitiveness relative to its EU partners.[18][19]

Although remaining above the euro area average, economic growth turned negative in 2009 for the first time since 1993.[20][verification needed] An indication of the trend of over-lending in recent years is the fact that the ratio of loans to savings exceeded 100% during the first half of the year.[21]

By the end of 2009, as a result of a combination of international (financial crisis) and local (uncontrolled spending prior to the October 2009 national elections) factors, the Greek economy faced its most severe crisis after 1993,[citation needed] with the second highest budget deficit (after Ireland) as well as the second highest debt (after Italy) to GDP ratio in the EU. The 2009 budget deficit stood at 13.6% of GDP. This, and rising debt levels (115% of GDP in 2009) led to rising borrowing costs, resulting in a severe economic crisis.[22] Greece falsified its financial data to try to cover up the extent of its massive budget deficit in the wake of the global financial crisis.[23]

The Greek labor force totals 4.9 million, and it is the second most industrious between OECD countries, after South Korea.[24] The Groningen Growth & Development Centre has published a poll revealing that between 1995 and 2005, Greece was the country with the largest work/hour ratio among European nations; Greeks worked an average of 1,900 hours per year, followed by the Spanish (average of 1,800 hours/year).[25]

 

 

[billcoe]

Oh? You didn't hear? It's talk like jb day: how's it feel - retard.