18/08/2012
The ease with which sections of the German press picked up the
misquoted version of the
Finland story says something of the febrile mood, and there seems no end to it yet.
Finland, though, turns out to have been a red herring, and
WSJ, amongst others, have issued a corrective, its copy headed: "Finland EU minister reiterates euro commitment".
This is Alexander Stubb, who says: "every government has various scenarios that they are working with. Our No. 1 scenario is that the euro zone will regain stability and we are working in a constructive way to achieve that goal".
More interesting are comment from former prime minister of Hesse, Roland Koch (CDU), and now head of the construction company Bilfinger, which employs 60,000 people. Interviewed in the
Süddeutsche Zeitung, with sections repeated in
der Spiegel, he is one of those warning against allowing the single currency to fail.
The destruction of the euro would return the integration of Europe to zero, he says, adding: "Zero is zero â not 1990 but taking us back to 1945". No one should aim for a failure of the monetary union or even a withdrawal of Greece. "The economic consequences for us, I think that's completely unpredictable", Koch then said.
Contributing very substantially to the debate is
Handelsblatt, which has been a major player in building this ongoing political crisis in Germany. Top spot in the readers' stakes is
a report that the EU commission wants the ECB to overseeing all major banks in the eurozone, as well as credit unions and savings banks.
This is another conflict in the making as Merkel has already signalled that the ECB should only supervise the 25 largest banks. But there is huge industry opposition as well.
Nationally or regionally active banks should continue to be under the supervision of national banking, says George Fahrenschon, president of the German Savings Banks and Giro Association (DSGV). "It is neither necessary nor realistic to expect the ECB to exercise supervision over all the 8,400 financial institutions in Europe", he says.
The story gets a commentary from
Oliver Stock, executive editor of
Handelsblatt Online, entitled: "Hands off!" The ECB was created with main task of ensuring monetary stability, he writes. It was not created for the job of banking supervision.
This ECB-critical line is reinforced by a separate guest post from Brun-Hagen Hennerkesm (pictured), chairman of the Familienunternehmen foundation. He says that the Bank is contemplating state financing, which is "destroying trust".
A good Europeans is one, "who respects the European treaties and the relevant national law and thus helps to ensure that the stability of the eurozone does no harm", Hennerkesm asserts. This was what Merkel attempted, but the Germans are quite alone in this. So finally, "the euro is proving a brainchild of political élites", he concludes.
Yet another report has the Association of Young Entrepreneurs in Germany convinced that EU law has been broken over the bailouts - and hoping for a signal from the European Court of Justice. Marie-Christine Ostermann says that Karlsruhe is too focused on the narrow question of the involvement of [the German] parliament, so it needs the ECJ to look at breaches of EU law.
And then we have Draghi, the Great Satan himself, with a report headed, "The Big Bertha will fire again". Leading economists are convinced that Draghi will keep his promise and Bank will go with massive intervention in the bond markets - with all its consequences.
This brings us to the British media which tells us that the markets have ended the week on a high "amid hopes for a eurozone solution and banking sector shrugging off scandal".
Will Hedden, sales trader at IG Index, says: 'The slow easing of tension about the eurozone crisis has been the chief hallmark of the past two weeks of trading. He adds: 'We know the crisis is far from a real solution, and that all we've had so far are fine words, but investors seem content to think that the ECB is readying something fairly impressive with a view to using it sometime in September".
Sentiment, we are told, is also being helped by German chancellor Angela Merkel's pledge while on a visit to Canada that Germany will do everything it can to save the euro.
This narrative has swept all before it so far in August, helped along by the perception that the Federal Reserve is also tiptoeing closer to more stimulus. This has allowed markets to take bad data in their stride, Hedden then avers.
And, of course, nothing can get between a man and his narrative. Except that there is more than one narrative. âEurope is now speaking openly about the end of the euro", says Die Welt. For better or worse, this is the one to watch.
