Full story here from ZeroHedge.
The power games among the ranks of Europe’s puppet elite continue (the real elite as is well known consists of a few CEOs of insolvent banks). Earlier today, Pierre Lellouche, France’s Europe minister, came out with another statement our of left field, that could set off the next round of European destabilization. In an interview with the FT, Lellouche said that the €440 billion European bailout “is an enormous change. It explains some of the reticence. It is expressly forbidden in the treaties by the famous no bail-out clause. De facto, we have changed the treaty.” As the bailout is already being pursued by various German scholars on grounds it is forbidden by the EU constitution, this statement will not be taken lightly by Germany which has had to lose major internal political credibility to enforce a bail out that it itself is not enamored with. Sure enough, the FT notes: “Mr Lellouche’s comments are likely to go down badly in Germany, where the government has insisted the debt guarantee scheme to help beleaguered eurozone members is a temporary mechanism, set up on an intergovernmental basis where Berlin retains a veto, and in no way implies a breach of the EU’s treaties.” Furthermore, as was noted previously, a finding that the bailout is not constitutional would render the entire support mechanism moot, resulting in the imminent bankruptcy of Greece. Is this yet another concerted subversive effort on behalf of the European labor interests to expel the underperforming PIIGS and sink the euro?
From the FT:
The eurozone’s €440bn debt guarantee scheme is tantamount to the adoption of a Nato-style mutual defence clause and marks an “unprecedented” change to the bloc’s treaties, according to France’s Europe minister.
In an interview with the Financial Times, Pierre Lellouche laid bare the French government’s conviction that the emergency stabilisation scheme agreed earlier this month amounted to a fundamental revision of the European Union’s rules and a leap towards an economic government for the bloc.
Mr Lellouche said Angela Merkel, the German chancellor, was “right” to say the EU could not be a “transfer zone” where rich members directly subsidised poorer ones.
But he said the scheme institutionalised solidarity between states. “The €440bn mechanism is nothing less than the importation of Nato’s Article 5 mutual defence clause applied to the eurozone. When one member is under attack the others are obliged to come to its defence.”
Mr Lellouche rejected suggestions that the Franco-German relationship had broken down because of tensions over the Greek and eurozone bail-out plans.
But he conceded that it required a lot of effort to make the relationship work, likening the challenge to postwar reconciliation between the two countries.
“The Franco-German relationship doesn’t work all by itself. Going back to the Schuman declaration, that was an extremely ambitious initiative. That was only five years after the war, after the occupation, after Oradour-sur-Glane [site of a Nazi atrocity in France], after Auschwitz. To hold out our hands and offer a partnership of equals with Germany required a lot of vision. That’s a bit what it is like today.”
On the other hand, this is most likely just France attempting to regain some shred of Eurozone influence after Germany has taken a material lead in leadership following its unilateral announcement of the naked-short ban.
The eurozone rescue plan has proved divisive in Germany but enjoys broad support in France. On the other hand, there was a consensus in Germany behind the sacrifices necessary to make German industry more competitive. When it comes to showing solidarity with Greece, France is miraculously united. But when it comes to drawing the consequences for us here in France, on reform of pensions, on reducing costs, on competitiveness, on working time, there is unfortunately less of a consensus. I regret that.
Alternatively, as a ZH reader suggests, “politicians know that austerity plans will be their death. They need the eurozone to blow apart, so they can all join the race to the currency bottom which for politicians is preferential to austerity.” As we pointed out two days ago, the Eurozone, and especially its sicker members, likely will push the limits of seeing how far they can push their “bailouters”, now that such a thing as “consequences to wrong actions” no longer exists. Either way, whether due to natural causes or sabotage, Europe will likely not survive in its current format for more than a year or two. And as Albert Edwards pointed out earlier, due to the resulting global imbalances, the US will be on that particular titanic, enjoying each and every blow as the Keynesian system sinks.