The Continental Economics Institute Currency Review
Sunday, August 28, 2011
Hysteria sweeping Germany
Euro bail-out in doubt as "hysteria" sweeps Germany
German Chancellor Angela Merkel no longer has enough coalition votes in the Bundestag to secure backing for Europe's revamped rescue machinery, threatening a consitutional crisis in Germany and a fresh eruption of the euro debt saga.
Seething discontent in Germany over Europe's debt crisis has spread to all the key institutions.Photo: AP
Mrs Merkel has cancelled a high-profile trip to Russia on September 7, the crucial day when the package goes to the Bundestag and the country's constitutional court rules on the legality of the EU's bail-out machinery.
If the court rules that the €440bn rescue fund (EFSF) breaches Treaty law or undermines German fiscal sovereignty, it risks setting off an instant brushfire across monetary union.
The seething discontent in Germany over Europe's debt crisis has spread to all the key institutions of the state. "Hysteria is sweeping Germany " said Klaus Regling, the EFSF's director...
Comment: People should consider how it were without the euro. Then indeed hystery would sweep the country because the mark would suffer from overvaluation as much as it now happens with the Swiss frank.