Germany and Italy Near Blows Over Euro

THE DAILY TELEGRAPH: German politicians from across the spectrum have reacted furiously to warnings by Italy’s Mario Monti that Bundestag control over EU debt policies threatens to bring about the “disintegration” of the European project.

“We must make it clear to Mr Monti that we Germans will not shut down our democracy to pay Italian debts,” said Alexander Dobrindt, secretary-general of Bavaria’s Social Christians (CSU).

Bundestag president Norbert Lammert said parliament’s integrity cannot be subordinated to the ups and downs of the markets. Free Democrat (FDP) leaders said Italy’s unelected prime minister is playing with political fire by trying to circumvent democratic legitimacy.

The dispute comes as relations between Germany and Italy touch the lowest ebb since the Second World War, with Il Giornale publishing a front-page picture of Chancellor Angela Merkel under the headline “Fourth Reich”.

“The tone of the debate has turned dangerous. We must be careful that Europe does not rip itself apart,” said German foreign minister, Guido Westerwelle. He himself fanned the flames over the weekend, saying he was “categorically” against further expansion of the EU rescue machinery or bond purchases by the European Central Bank. “I can’t imagine that a majority of the Bundestag will back unlimited debt liabilities,” he said. » | Ambrose Evans-Pritchard | Monday, August 06, 2012

Euro Doomed from Start, Says Jacques Delors

THE DAILY TELEGRAPH: The euro project was flawed from the start and the current generation of European leaders has failed to address its fundamental problems, Jacques Delors, the architect of the single currency, declares today.

In an interview with The Daily Telegraph, Jacques Delors, the former president of the European Commission, claims that errors made when the euro was created had effectively doomed the single currency to the current debt crisis. He also accuses today’s leaders of doing “too little, too late,” to support the single currency.

The 86-year-old Frenchman’s intervention comes the day after France and Germany took another step towards the creation of a full “fiscal union” within the European Union and David Cameron insisted that Britain must remain a major player in Europe. Mr Delors, who led the commission from 1985 to 1995, played a central role in the process that led to the creation of the euro in 1999. In his first British newspaper interview for almost a decade, he says that the debt crisis reflects a threat to Europe’s global role and even basic Western democratic values.

Mr Delors claims that the current crisis stems from “a fault in execution” by the political leaders who oversaw the euro in its early days. Leaders chose to turn a blind eye to the fundamental weaknesses and imbalances of member states’ economies, he says. “The finance ministers did not want to see anything disagreeable which they would be forced to deal with,” he says.

The euro came into existence without strong central powers to stop members running up unsustainable debts, an omission that led to the current crisis. Now that the excessive borrowing of countries such as Greece and Italy has brought the eurozone to the brink of disaster, Mr Delors insists that all European countries must share the blame for the crisis. “Everyone must examine their consciences,” he says. » | James Kirkup, Deputy Political Editor | Friday, December 02, 2011

Tony Blair Says Eurozone Breakup Would Be 'Catastrophic'

THE GUARDIAN: Former prime minister calls for 'whole weight of Europe' to stand behind single currency and resolve eurozone debt crisis

Tony Blair has warned Europe's leaders of the "catastrophic" consequences of the breakup of the eurozone, saying the current crisis was the most serious the European political project had ever faced.

The day after his former political ally Silvio Berlusconi resigned as Italy's prime minister, Blair told the BBC's Andrew Marr Show there had "never been a tougher time to be a leader" but said Europe's current cohort risked being "behind the curve".

The former prime minister continued to hold out the possibility that in the "very long term", Britain might still join the euro, should the single currency survive and stabilise.

He told Marr: "You've got to be careful of always being in a situation where you are just behind the curve of decision-making.

"What we could have done to stabilise this situation a few months back, you now have to do even more to stabilise it today."

Blair said he had always believed Europe's monetary union would require a fiscal union, and on Sunday he called for a "long-term framework of credibility", which included strong fiscal co-ordination.

"Right now for the single currency it's essential it's preserved, that the whole weight of Europe, of its institutions stand behind it."

He added: "If the single currency broke up, it would be catastrophic." » | Allegra Stratton, politics correspondent | Sunday, November 13, 2011

BBC: Tony Blair: Euro collapse would be catastrophic » | Sunday, November 13, 2011

Play BBC Video: »Tony Blair: Eurozone break-up would be ‘catastrophic’: Former British Prime Minister Tony Blair has said that the break-up of the eurozone would be "catastrophic" for all of Europe, including the UK. ¶ Speaking to the BBC's Andrew Marr, Mr Blair said the crisis was the biggest faced by the eurozone countries since the creation of the single currency. ¶ He added the choices to be made are "very difficult and very painful". » | Sunday, November 13, 2011

Berliners Dream of Return to Deutschmark
THE OBSERVER: Enthusiasm for single currency fades as resentment grows over Greek bailout

Waitress service in Berlin's Mitte district. The local joke is that the Greeks order and the Germans get the bill. Photograph: The Observer
In the back of the Berliner Republik bar on the banks of the river Spree, Matt, Otto and Christian's eyes are fixed on a screen in front of them. The names and prices of 18 German draught beers flash up, bright green on a black background, and change every few seconds, according to who has ordered what.

It's a pub game for the modern age, based on supply and demand. The trick is to buy the beer cheaply and then give yourself a pat on the back when demand pushes the price up.

"It gives a bit of a risqué edge to ordering," says Otto, a graphic designer. "But it also makes you feel strangely vulnerable."

The screen is more fruit machine than stock market, but it reflects the sense of playing a lottery common in Angela Merkel's Germany as it has pumped billions of euros into bailing out profligate Greece and propping up the single currency, without knowing whether the injection will do any good.

As the prices of the beers rise, news comes through from Frankfurt that in the real world Germany's DAX index has fallen 106.86 points, despite the €750m rescue package that the Bundestag has just narrowly approved. On Wall Street and elsewhere the markets wobbled, a sure sign that no one believed the crisis was anywhere near over.

On the pavement outside the bar, drawing on a cigarette, Pamela Schreiber pauses in contemplation. "Do I consider myself European? Well, of course, but first and foremost I'm a German," says the 33-year-old set designer with conviction.

The answer is not one that you would have expected a few years ago from a young person in Germany. This is the country where European enthusiasm has been easiest to find and where, since the war, European interests have taken precedence over nationalist ones. But, according to Schreiber, Germans feel increasingly torn over Europe.

"We always knew in our heart of hearts that the euro would never be as solid as our deutschmark, but we gave up our beloved currency, which was actually central to our identity, because we believed in the European project so fervently," she says.

Now there is talk, albeit based on blog gossip and a tabloid desire to whip up a good tale, of a return of the mark. Some even claim that secret supplies of the defunct currency – the strength of which was seen as a legacy of the sweat and tears that Germans spent to build up their ruined economy after the war – are being printed in secret underground locations. >>> Kate Connolly in Berlin | Sunday, May 23, 2010

Alistair Darling Trapped in Euro Deal
THE TELEGRAPH: Alistair Darling has agreed to consult directly with George Osborne and Vince Cable as European leaders looked poised to push through a new multi-billion pound bail-out fund part-financed by British taxpayers.

Mr Darling, who is still officially Chancellor of the Exchequer, will represent Britain at an extraordinary meeting of European finance ministers in Brussels today, slated to adopt far-reaching new powers for the Commission and its fellow bodies.

The meeting is the first major policy test for the hung parliament, coming with Britain in limbo between two governments. In a sign of the highly unusual nature of the situation, the Chancellor has privately committed to consulting before the meeting with his counterparts in the Conservatives and Liberal Democrats.

However, despite the likelihood that Labour will be ejected from Downing Street imminently, Mr Darling will have the final say over Britain's vote on participation in the new scheme.

The proposal, tabled by Nicolas Sarkozy in an emergency meeting late on Friday night, will involve the creation of a €60bn "European stabilisation mechanism" designed to provide bail-out support for countries which may face similar strain to Greece in the coming months.

It is thought to be focused particularly on Spain and Portugal, both of whose leaders fear an assault by "bond vigilantes" in the market who have scented weakness within the eurozone. The plan will have fiscal implication for all European Union countries, including the UK. The key element is an extension of an existing bail-out package, already used to support Hungary and Latvia. >>> Edmund Conway and Bruno Waterfield | Saturday, May 08, 2010

Helmut Kohl: Warum wir Griechenland helfen müssen
WELT ONLINE: Für Altbundeskanzler Helmut Kohl steht außer Frage, Griechenland zu helfen. Schließlich gehe es um den Zusammenhalt Europas und das Fundament für eine stabile, erfolgreiche Zukunft. Auf WELT ONLINE schreibt er, wer Griechenland heute Beistand verweigere, versage vor den nachfolgenden Generationen.

Es ist gar keine Frage, dass wir in der aktuellen Krise Griechenland nicht allein lassen dürfen, sondern dass wir in Europa unserem Partner Griechenland solidarisch helfen müssen. Das liegt auch in unserem wohlverstandenen deutschen Eigeninteresse.

Wir müssen gerade in der aktuellen Krise bedenken, was das gefestigte Haus Europa und der Euro für uns alle, für Deutschland, für den Kontinent und für die ganze Welt bedeuten.

Mit anderen Worten: Wer Griechenland heute Beistand und Hilfe versagt, versagt vor der Welt und den nachfolgenden Generationen, denn er gefährdet das Haus Europa in seinen Grundfesten.

Das gefestigte Haus Europa kann uns nicht gleichgültig sein, denn es ist unsere Zukunft. Das dürfen wir nie vergessen. Wer wie ich den Krieg als junger Mensch mit all seinen Schrecken und seiner Not erlebt hat, kann aus eigener Erfahrung ermessen, welchen Wert das geeinte Europa für Frieden und Freiheit hat. >>> Dr. Helmut Kohl | Samstag, 08. Mai 2010

In der aktuellen Debatte über die Hilfen für Griechenland hat Bundeskanzler a.D. Dr. Helmut Kohl seine Position zusammengefasst, die er beim offiziellen Festakt zu seinem 80. Geburtstag am Mittwoch in Ludwigshafen dargestellt hat.

WIKI: Helmut Kohl >>>

Verbunden / Related:

THE WALL STREET JOURNAL: Zeal and Angst: Germany Torn Over Role in Europe >>> Marcus Walker and Matthew Karnitschnig | Saturday, May 08, 2010

Zeal and Angst: Germany Torn Over Role in Europe
Helmut Kohl, left, returns to the European stage. Photograph: The Wall Street Journal
THE WALL STREET JOURNAL: LUDWIGSHAFEN, Germany—Helmut Kohl, frail and confined to a wheelchair, returned to public view this week, imploring his countrymen not to abandon the goal he spent his political life pursuing: a united Europe.

"Today, I am convinced more than ever that European unification is a question of war and peace for Europe and for us, and the euro is part of our guarantee of peace," the former chancellor, his voice uneven and raspy, told guests at a celebration for his 80th birthday.

As Chancellor Angela Merkel looked on, Mr. Kohl issued a thinly veiled critique of her reluctance to help Greece, saying he couldn't understand "people who act as if Greece doesn't matter." Of course the situation is difficult, but Germany must pull out all the stops, he said, drawing applause from the crowd.

The scene underscored the threat Greece's turmoil poses to monetary union, the grandest expression of the European continent's drive toward integration. Mr. Kohl led the unification drive two decades ago. Now the increasingly disruptive debt problems in Greece and elsewhere post the question: What price is Germany willing to pay to save Europe? >>> Marcus Walker and Matthew Karnitschnig | Saturday, May 08, 2010

Greece Debt: EU Agrees Bailout Deal
THE GUARDIAN: Exclusive: Germany plays pivotal role in potential eurozone rescue package for Greek debts

The eurozone has agreed a multibillion-euro bailout for Greece as part of a package to shore up the single currency after weeks of crisis, the Guardian has learnt.

Senior sources in Brussels said that Berlin had bowed to the bailout agreement despite huge resistance in Germany and that the finance ministers of the "eurozone" – the 16 member states including Greece who use the euro – are to finalise the rescue package on Monday. The single currency's rulebook will also be rewritten to enforce greater fiscal discipline among members.

The member states have agreed on "co-ordinated bilateral contributions" in the form of loans or loan guarantees to Greece if Athens finds itself unable to refinance its soaring debt and requests help from the EU, a senior European commission official said.

Other sources said the aid could rise to €25bn (£22.6bn), although it is estimated in European capitals that Greece could need up to €55bn by the end of the year.

Germany, the EU's traditional paymaster, but the most reluctant to come to the rescue of a fiscal delinquent in the current crisis, has played the pivotal role in organising the rescue package, the sources added. >>> Ian Traynor in Brussels | Friday, March 12, 2010

Germany and France Strike Deal to Rescue Greece from Debt Crisis
THE TELEGRAPH: Germany and France have agreed a deal to “safeguard financial stability” for Greece and the wider eurozone following crisis talks at a European Union summit.

Political agreement on general principles was thrashed out during tense negotiations between Germany, France, Greece and the European Central Bank on Thursday morning.

”There is an agreement on the Greek situation. We will communicate now the agreement to the other leaders,” Mr Van Rompuy said.

Jose Manuel Barroso, the European Commission President, said that Greece would receive support in return for and aligned to progress on sweeping austerity cuts.

”Greece needs to do whatever is necessary, including additional measures, to ensure that the deficit reduction targets for this year are met,” said an official. ”Secondly, in that case the euro zone members should be ready to safeguard financial stability in the euro zone area as a whole.”

The EU summit was delayed to buy time as Germany and France brokered frantic negotiations with the ECB and Commission to save the eurozone by putting together a rescue package for Greece. >>> Bruno Waterfield in Brussels | Thursday, February 11, 2010

Markets Target Euro as Doubt Swirls Over Greece
TIMES ONLINE: The leaders of France and Germany agreed today to work together to tackle the Greek debt crisis but failed to reassure jittery European financial markets.

Both the euro and Greek government bonds enjoyed a moment of respite after reports that the new EU President, Herman Van Rompuy, had brokered a bailout deal in a meeting this morning with President Sarkozy, Chancellor Angela Merkel and Jean-Claude Trichet, head of the European Central Bank.

“Euro area member states will take determined and co-ordinated action if needed to safeguard stability in the euro area as a whole," Mr Van Rompuy told reporters in Brussels, reading from a statement agreed by all 16 eurozone states. "The Greek government has not requested any financial support."

But as the EU's 27 leaders went into summit talks this afternoon, the lack of detail began to weigh with market traders looking for action - and hard cash - not words. The euro, which has lost some 10 per cent in value against the dollar since late 2009, initially rose slightly on Mr Van Rompuy's statement to $1.3755 before falling back $1.3688.

"It just looks like a pledge of solidarity, but no actual details of a program which is why the euro is still in the doldrums,” said Neil Mackinnon, global macro strategist at VTB Capital. “Unless, there’s further news out later this afternoon, the markets will consider the EU summit response as a disappointment." >>> Philippe Naughton and David Charter in Brussels | Thursday, February 11, 2010

Germany, Forced to Buoy Greece, Rues Euro Shift
THE NEW YORK TIMES: BERLIN — As Europe edges toward emergency guarantees to stem market panic over one of the most profligate members of the euro bloc, the country that the region turns to for leadership, Germany, is suffering from growing doubts about the European experiment it long championed.

Reluctant German leaders now find themselves forced to help Greece remain solvent, or risk watching markets attack one weak member after the next, from Portugal to Spain to Italy, threatening the stability of the euro, the European currency Germany fought so hard to create.

On Thursday, European leaders meeting in Belgium announced they had agreed to a political statement to try to reassure bond markets and head off the crisis, and said that finance ministers would work through the details next week.

Earlier, in a conference call with the finance ministers from the 16 countries that use the euro and the president of the European Central Bank, Jean-Claude Trichet, officials said that some action had to be taken to calm markets and take pressure off Greece. It appeared clear that Germany, with an assist from France, would have to take the lead. “The Germans are the only ones with deep pockets,” said Daniel Gros, director of the Center for European Policy Studies in Brussels. “If it was just Greece, they could consider letting them go down the drain, but it threatens the entire euro zone.”

Berlin has been mostly silent on the matter. That is partly to put pressure on Greece, as civil servants struck there Wednesday to oppose cutbacks that the government has promised in order to rein in its enormous budget deficit.

But a bailout will be politically awkward for Chancellor Angela Merkel’s government. It is precisely the financial millstone that opponents warned about when Germany gave up its treasured mark, a move that a majority of people here, in contrast to their political leaders, opposed at the time.

“If the German government would just transfer money to Greece, people in Germany would feel their worst fears had come true,” said Thomas Mayer, chief economist at Deutsche Bank. >>> Nicholas Kulish | Wednesday, February 10, 2010

Watch New York Times video 1: Financial Crisis Deepens in Greece >>>

Watch New York Times video 2: Greeks Strike Amid Financial Crisis >>>

Britain Will 'Obviously' Join Euro Says Mandelson
Euros: Google Images
THE TELEGRAPH: Britain "obviously" remains committed to joining the euro following the currency's "success" in helping its members to weather the economic crisis, Lord Mandelson said.

The newly promoted First Secretary of State, speaking in Berlin, hailed the euro as a saviour that had brought stability to the European Union during financial turmoil.

"It is perfectly clear that the euro has been a great success in anchoring its eurozone members during this financial crisis," he said.

"Imagine where all of us would have been if it hadn't. I hope people will recognise that this represents a major vindication for the single currency."

Asked if the British Government would consider joining the euro, Lord Mandelson replied: "Does it remain an important objective for Britain to find itself in the same currency as that single market in which it interacts? Obviously yes."

He added: "That has to be a decision taken on the right terms in the right circumstances and conditions and therefore at a future time than we have now." >>> By Bruno Waterfield in Brussels | Thursday, June 11, 2009