"..........Shortly before economic and monetary union (EMU) started in 1999, German Chancellor Helmut Kohl said the single currency was a question of war and peace. He was right to set the euro in the context of an epochal struggle between binary forces perennially tearing at the German soul: instability and stability, East and West, Poland and France, America and Russia, capitalism and communism.
Yet even Kohl did not foresee that EMU, the proudest yet most vulnerable of Europe’s accomplishments, ............" etc., etc. and again etc.
[see below REFERENCES "In euro crisis, Merkel is replaying 1931"]
"......In recent days, he has said publicly it has to go in one of two directions. Either it takes the path of a fiscal union in which member countries fuse together their economic and financial systems into a much more robust framework that will protect them from internal dislocation. Weidmann says, coolly, this is somewhat unlikely. Or EMU remains a looser grouping of countries that will face the discipline of the financial markets if they fail to produce economic convergence. This could lead to harsh consequences in cases where states fall out of kilter with stronger-performing economies. ........."
[same source, see below REFERENCES "In euro crisis, Merkel is replaying 1931"]
"......Weidmann painted Draghi at the wall
He warns against euro bailout by printing money, the "drug" central bank financing, usurpation of authority. Bundesbank chief Weidmann, attacked again ECB chief Draghi - another German defends himThere are monetary cultures, worlds collide here, or better, popping another. The euro crisis is increasingly characterized by a fundamental clash between the European Central Bank (ECB) and the German Federal Bank, a dispute between the Italian ECB chief Mario Draghi and its national counterpart, Bundesbank chief Jens Weidmann. The issue: Can and should the ECB buy up government bonds strengthened ailing euro-zone countries to support them? Is this the recipe for saving the ailing euro - or propels the currency remains, only to ruin it fueled inflation? For weeks this dispute is gaining focus - as well as the wording of the so thoughtful central bankers. ECB President Mario Draghi had earlier this month announced a second, beating stronger bond purchase program to save the euro and to help heavily indebted countries.On weekends Weidmann in "Spiegel" fueled the fire - and criticized the plans Draghi as sharp as straightforward. The planned purchase of government bonds was "too close to a public finance by printing money," said Weidmann the magazine. "In democracies, should decide on such an extensive pooling of risks, the parliaments and not central banks." The fundamental problems in the context of the debt crisis would not be resolved in this way. On the contrary: "The windfall would arouse the central banks continued greed," warns Weidmann. "We should not underestimate the risk that central bank financing can be addictive like a drug." ....." etc.[also for this excerpt see below "Weidmann painted Draghi at the wall"]
Monday, August 20, 2012
And they took the control. [second part]
Sept. 26, 2011, 12:02 a.m. EDT
In euro crisis, Merkel is replaying 1931
Commentary: Contagion risk may sweep away the status quo