http://www.spiegel.de/international/germany/german-constitutional-court-to-consider-anti-esm-complaints-on-july-10-a-842120.html
The plaintiffs, who oppose Germany transferring more power to European institutions, are trying to obtain a temporary injunction against the two laws to stop them entering into force until the court has addressed the main complaints against the measures at a later date and ruled whether the laws in question are constitutional. It is highly unusual for the court to hold a hearing on requests for a temporary injunction. The fact that it is doing so is regarded as a sign of the importance of the issue.
She was pushed into backing down by the leaders of Italy, Spain and France, andGermany's dominance in Europe has been called into question as a result -- although some analysts say she scored a victory by securing agreement to a European central supervision authority for banks, to be run by the European Central Bank.
The German parliament had barely approved the permanent euro rescue fund and the fiscal pact on Friday when opponents of the measures filed requests for a temporary injunction with the German constitutional court. On Monday, the court announced it will hear the complaints on July 10.
In the runup to Friday's vote, the Karlsruhe-based court had asked German President Joachim Gauck to refrain from signing the laws into force until it had decided on the requests for a temporary injunction. That has already delayed the start of the permanent rescue fund, the European Stability Mechanism, which was supposed to enter into operation on July 1. If the court grants a temporary injunction, it would push the start date back even futher.
Several complaints were filed with the court late on Friday after the measures were passed in the two houses of the German parliament, the Bundestag and Bundesrat. Among the plaintiffs are the parliamentary group of the left-wing Left Party, the conservative Bavarian politician Peter Gauweiler and an association called "More Democracy" which has 12,000 co-plaintiffs. Gauweiler even dispatched a courier around midnight on Friday to personally deliver his request to Karlsruhe.
Although the passage of the two measures in the parliament was seen as a victory for German Chancellor Angela Merkel, it came at a high price. The opposition center-left Social Democrats and Greens demanded that Merkel support a growth pact for Europe to complement the fiscal pact on budgetary discipline, one of the cornerstones of the chancellor's strategy to fight the euro crisis. In addition, Merkel had to make concessions to Italy and Spain at last week's European Union summit in Brussels, which have earned her criticism from within her own center-right camp.
and....
http://globaleconomicanalysis.blogspot.com/2012/07/faber-says-germany-should-abandon.html
Faber Says Germany Should Abandon the Euro
Marc Faber, publisher of the Gloom, Boom and Doom Report, spoke with Bloomberg Television’s Betty Liu this morning and said that, “If I were running Germany, I would have abandoned the eurozone last week.”
Faber on the eurozone crisis:
“If you put one or 100 sick banks in a union, it does not change the fact that they're sick. In my view the markets are rallying because they were grossly oversold. When markets are grossly oversold, especially markets of Portugal, Spain, Italy, France, then any news that is not disastrous news propels stocks higher. I think that combined with seasonal strength in July, the rally has carried on somewhat. But it is another cosmetic fix, a quick fix that does not solve the long-term fundamental problem of over investment in the euro zone. And what it does, basically, it forces Germans to continue to finance people in Spain and Portugal and Greece that are living beyond their means.”
“If I were the Germans, if I were running Germany, I would have abandoned the eurozone last week…It is a costly decision, but losses are there and somewhere, somehow, the losses have to be taken. The first loss is the banks. In the case of Greece, one should have kicked out Greece three years ago. It would have been much cheaper.”
On whether he’s picking up European equities:
“Yes. In Portugal, Spain, Italy, and France, the markets are either at the lows of March 2009, or lower. Along with bad companies and the banks, there are also reasonably good companies. Stellar companies, but they have been dragged down. I see value in equities, regardless of whether the eurozone stays or is abandoned.”
“If you put one or 100 sick banks in a union, it does not change the fact that they're sick. In my view the markets are rallying because they were grossly oversold. When markets are grossly oversold, especially markets of Portugal, Spain, Italy, France, then any news that is not disastrous news propels stocks higher. I think that combined with seasonal strength in July, the rally has carried on somewhat. But it is another cosmetic fix, a quick fix that does not solve the long-term fundamental problem of over investment in the euro zone. And what it does, basically, it forces Germans to continue to finance people in Spain and Portugal and Greece that are living beyond their means.”
“If I were the Germans, if I were running Germany, I would have abandoned the eurozone last week…It is a costly decision, but losses are there and somewhere, somehow, the losses have to be taken. The first loss is the banks. In the case of Greece, one should have kicked out Greece three years ago. It would have been much cheaper.”
On whether he’s picking up European equities:
“Yes. In Portugal, Spain, Italy, and France, the markets are either at the lows of March 2009, or lower. Along with bad companies and the banks, there are also reasonably good companies. Stellar companies, but they have been dragged down. I see value in equities, regardless of whether the eurozone stays or is abandoned.”
“[I’m buying] anything that has a high yield, or what I perceive to have a relatively safe dividend. In other words, I do not expect the dividends to be slashed by 90%...I am not buying banks, but maybe they could rally. I am just not buying them because I think there will be a lot of equity dilution and recapitalization. I’m not that keen on banks.”
and......
http://www.spiegel.de/international/europe/review-of-german-press-commentaries-on-outcome-of-eu-summit-a-842106.html
German Chancellor Angela Merkel made a major concession at the European Union summit last week by agreeing to give the euro zone's new permanent rescue fund, the European Stability Mechanism (ESM), the power to inject aid directly into ailing banks.
Some German media commentators say Merkel was forced into a corner by the "blackmail tactics" of Spanish Prime Minister Mariano Rajoy and Italian Prime Minister Mario Monti, aided by French President François Hollande, and that Berlin's relations with Paris in particular have been soured as a result.
The deal has been condemned as a blow to German taxpayers -- but an inevitable one, it seems. Merkel, some commentators write, merely did what she has done right since the start of the euro crisis: stand firm until the time came to give in. If she hadn't caved, the crisis may well have spiralled out of control.
Business daily Financial Times Deutschland writes that the summit took some historically important decisions.
"It made it possible to decouple banking risks from the state risks. Ailing banks like those in Spain that need recapitalizing should no longer pull into the abyss the governments that support them and are finding the bailout increasingly hard to finance. Merkel gave in on this issue. She caved in, some German commentators are saying. If that is so, then she caved in cleverly. The compromise was necessary and sensible. The risk decoupling won't just lead to a short-term calming of markets and end the famous 'death spiral.' It will also give governments enough time to structurally strengthen Europe against new crises."
"But this summit agreement has a flaw too. The chancellor insisted on a functioning European banking supervisory authority being established first. Europe will again lose time as a result. Setting one up isn't a matter of just a few weeks. The chancellor's demand is justified. But it will tempt the Spanish government to delay the necessary banking consolidation. Why should it help banks now if it has to accept conditions and yield increases that it would be spared at a later date? Madrid's delaying tactics are dangerous and only increase the danger of a euro exit."
Conservative Frankfurter Allgemeine Zeitung writes:
"German Chancellor Merkel has largely herself to blame for being labelled as the loser of the EU summit by the opposition in the parliamentary vote on the ESM bailout fund.Her offhand remark 'as long as I live' following the statement that there would be no 'total debt liability' in the euro zone created the impression that the German position in the Brussels negotiations would be set in stone. But it's the nature of negotiations, especially in the EU, that everyone involved makes concessions from their initial positions in order to reach a compromise. That also applies to Germany, even though it is the supporting pillar of the currency union."
"The tactical ploys used to reach compromises are a different matter. Frau Merkel was blackmailed pretty brutally by politicians from the south who share fundamental long-term German principles, by the Italian Monti and the Spaniard Rajoy (with support from the Frenchman Hollande), because these countries need swift aid. It will soon become clear if the new Brussels agreement will achieve that. But it's certain that these blackmail tactics will leave marks. Relations between Paris and Berlin in particular are severely strained. President Hollande will get a sense of that at the next opportunity."
Conservative Die Welt writes:
"At the latest EU summit Germany -- again -- agreed to a lot of solidarity without getting much control in return. There is a big danger that the euro zone will get into an ever deeper imbalance as a result. If ailing economies can get at the money of solid states more easily, this will inevitably strengthen the opponents of a rigorous reform program in those countries. Rome and Madrid are unlikely to find it difficult to decide whether they would rather burden their citizens and their children and grandchildren or the German taxpayer. And Germany won't even have a veto right in the permanent rescue fund in future because qualified majorities will suffice for aid. It remains to be seen whether the euro will survive the institutionalized irresponsibility."
Left-wing Die Tageszeitung writes:
"It was an unsual image: Angela Merkel as the loser. She had to back down in Brussels. The ESM will dole out loans to crisis nations without imposing tough austerity. After Merkel's vow to fight forever against mutualized debt in the EU, that didn't look so good. The apparent defeat in Brussels is nothing new. It fits seamlessly into Merkel's strategy - or rather, her pattern of reaction -- since the euro crisis started. She always said no, only to abandon each no when it became opportune to do so."
"Merkel followed a political cost-benefit calculation. A German victory in Brussels over an Italian technocrat government being crushed by interest rate burdens would have been more expensive than this defeat. An EU summit without a result would have brought the euro's implosion dramatically closer. But Germany already won in the EU long ago. Berlin has europeanized the German economic model by imposing the fiscal pact. The price will be paid by less export-focused nations being forced into rigid austerity. And things look good for Merkel in Berlin too. Effectively, she's governing not with a center-right government but with a grand coalition of conservatives, Greens and center-left Social Democrats. The liberals (the pro-business Free Democratic Party, junior partner in the center-right coalition) are allowed to complain a bit. Meanwhile, the Social Democrats are bravely trying to persuade themselves that they won't be her junior partner again in 2013 (the next general election is scheduled for 2013. The SPD was the junior partner in a so-called grand coalition wit Merkel's conservatives from 2005 until 2009)."
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