Δευτέρα, 6 Μαΐου 2013

EUROBLOWN: While the human cost in ClubMed is massive, the financial cost to Berlin is zilch.

Germany needs to remember that, without debt forgiveness, it wouldn’t be in the driving seat today
Earlier today, I dealt with the question of cultural misfit between what Angela Merkel says she wants for Germany, and what she wants for Europe. On a great many previous occasions, I have in turn argued that the Franco-German attitude to ClubMed is a cake liberally strewn with the raisins of cowardly hypocrisy, a large dollop of outright lies having been added particularly in relation to Greece and Cyprus to try and render the Konditerei palateable. Readers can either use the search engine available on this site to judge for themselves the megatons of evidence I have presented to support that view….or simply keep saying I am a bigot delivering cheap anti-German shots based on ancient history that is now dead and deeply buried.
So in this part of the Greek Orthodox Easter Friday Festivities, I’d like to revisit recent European history going back roughly seventy years…..and show how the devious double standards of then apply directly to those of now. I promise solemnly there will be no sleight of hand: merely the facts of each situation.
Sixty years ago in London (a city still scarred by bombing and shuddering with cold austerity) an agreement was reached to cancel half of postwar Germany’s debt. Germany emerged from World War II still owing debt that originated with the Great War of 1914-18. As a trained historian, my view has always been that the mad reparations vengeance of the Versailles conference at the end of of Great War gave Adolf Hitler a public grudge sufficient to make him look like a good German as opposed to a mad Austrian. But we do need to bear in mind here that in 1953, Germany’s main outstanding debts derived from reconstruction loans made immediately after the end of the Second World War.
Germany’s forgiving creditors at the time included Greece and Spain, Pakistan and Egypt, as well as the US, UK and France. It is very hard indeed to perceive much forgiveness of ClubMed today. This is particularly apposite when one considers that no ClubMed country of which I’m aware has either (a) invaded any of its neighbours or (b) massacred vast numbers of people among those neighbours. German war crimes were written off at Nuremburg with a few hanged Nazis.
Fast forward now to a present day in which Greece was hard-sold loans by the ECB under Jean-Claude Trichet, and then given a seminar by Goldman Sachs in how to lie about its indebtedness. Fully €150bn of that indebtedness involved arms bought by Greece from France and Germany. A Bavarian Court later railed at length about the dishonesty of how those deals were done – including a submarine from Germany for which the Greeks paid…but which never actually materialised, as such.
The general line taken by the NordEuropean tabloid media – and its conductor the German CDU – has been that ClubMed idleness and mendacity has cost theach so fleissig Germanic tribes a fortune in money they would rather have spent on their own long-suffering and patient citizens.
The truth is, however, somewhat different. A two percentage point fall in borrowing costs that accompanied the ClubMed downturn (and globalist banking fragility among which DeutscheBank was prominent) delivered unto Berlin a whopping windfall gain. German insurance giant Allianz estimates that the BundesRepublik saved 10.2 billion euros in 2010-2012, as yields on its 10-year bonds fell from 3.39% to 1.18%.
Klaus Regling, the German who just signed the Cyprus bail-in on behalf of those who paid nothing towards it, uses this very reality when calming irate Frankfurt bankers. In particular, when making presentations to the Bankfurters, he cites a study by Jens Boysen-Hogrefe of the IfW economic institute, which shows that the German federal budget saved 8.6 billion euros in 2011 due to low ECB interest rates, and the safe-haven impact of investors putting money into Germany. IfW now avers that those savings rose to 9.6 billion in 2012, and that safe-haven investments alone will be worth 2 billion in 2013.
“If we add up the interest rate advantages gained in the period 2010 to 2012 and those that Germany will benefit from in the years to come, we arrive at cumulative interest relief for the German budget of an estimated €67billion,” Allianz said in a paper published in September 2012.
So: here we are again back in the Chancellery of Angela Merkel, that lover of truth and heroine of the German electorate. In Dresden on April 25th this year, she told the German Bank Savings Association, “Germany would actually have to raise rates slightly at the moment” if it wasn’t in the eruozone….the clear imputation being that loose ClubMed monetary policy was costing the Germans dear. Her Coalition partner Horst Seehofer said in July 2012 that “Germany cannot afford any more bailouts. Others want to get at our money without asking too much of themselves”.
All of this is fantasy drivel designed to make Germany look like the victim. Again I stress: I am not making any of this up. The idea that Germany has, thus far, been bankrolling ClubMed is spin at best and cant at worst.

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