From Kiron Sarkar:
The FT, as usual, says it all. Copy of article attached.
No “quick fixes” reports Mrs Merkel to the German Parliament today. Instead the creation of a legally-enforceable “fiscal union”, through treaty changes – bi lateral agreements are 2nd best, though may be the initial approach – I clearly agree;
No IMMEDIATE INTRODUCTION ( read – they will be introduced some time after the treaty changes enforcing fiscal union is in place) of Euro Bonds;
She rejected charges that Germany is taking over the Euro Zone – well……;
Germany has BENEFITED GREATLY from the Euro – HALLELUJAH, well finally she is telling the Germans the reality of the situation;
The fiscal rules must be legally enforecable through the European Court of Justice and include automatic sanctions for those who do not comply – certainly hope its implemented as the Germans want – the French hate this, but they have no choice – I certainly hope;
Germany will not interfere with the “independent” ECB – come now, the deal being hatched up is that if tough fiscal rules are put in place, the ECB (very similar to the situation with the BoE/UK Government) will embark on bond buying/QE/interest rate cuts/lending to the IMF to on lend to Euro Zone countries (EFSF being a “dead duck”), etc, etc ie monetary easing. However, it’s exactly the line she should be taking;
She understands that a “deal” needs to be announced at the 9th Dec summit. Too true, but a very limited time available;
Amazingly, she conceded that AUSTERITY IS NOT ENOUGH – (Bloody hell – is this really a German saying this – clearly TOTALLY RIGHT.
“It is essential we get back to more growth” and follows up with “That is one of our most important goals”. I promise you, direct quotes from Mrs Merkel’s speech to the German Parliament.
Boys and Girls, Mrs Merkel has discovered religion.
Just to reinforce her “road to Damascus moment” – I quote Mrs Merkel again,
“We are saving (German) banks and ourselves and our jobs”
I understand that number of you are deeply sceptical of Europe – as you will recall from my previous blogs – I have probably been the most sceptical.
However…….
I will repeat, when Germany gets it and pursues a policy (with it effectively in charge), believe you me, it has a very good chance of success.
I remain bullish.
It has taken me more than 1 1/2 hours just to produce this, given the local Internet problems here in Goa. Impossible to do more.
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FT:
Merkel calls for rapid EU treaty change
Angela Merkel has called for European Union treaty change to introduce as quickly as possible a legally-binding set of rules for the eurozone’s economic management.
Looking very sombre in a black suit and not deviating from her written text, the German Chancellor said in a speech to the Bundestag, the German parliament, the eurozone was not facing a debt crisis, but a crisis of confidence that would take years to resolve.
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http://link.ft.com/r/IOCBMM/ZG74XJ/QE3FX/VLBMBQ/97INN6/T3/h?a1=2011&a2=12&a3=2
