Schaeuble Claims German EFSF Contribution Has Maxed Out at 211 Billion Euros; Why Should Anyone Believe Him?

On Saturday, German Finance Minister Wolfgang Schaeuble ruled out larger German EFSF contribution

Finance Minister Wolfgang Schaeuble was quoted on Saturday ruling out a higher German contribution to the euro zone's rescue fund beyond the 211 billion euros approved by parliament last week.

In an interview with the Super-Illu newspaper published on Saturday, Schaeuble said Germany would not contribute more than that amount to the 440 billion euro European Financial Stability Facility (EFSF).

"Germany will take on 211 billion euros in guarantees and that's it, that's really the end of it with the exception of the interest costs on top of it," said Schaeuble, who has faced criticism recently for revising upwards earlier pledges on ceilings for the guarantees.

"Really the End of It?"

Please consider Schäuble stratagem courtesy of Google Translate.

The euro rescue package is too small, a direct expansion is ruled out. Therefore the policy is looking for a tool to increase the sum in another way. Leaders of the G-20 have confirmed this long ago - only Finance Minister Schäuble denied on all channels. His motto: talk so ably beside the point that even half-truths do not apply later than grossest falsehood.

Leaders of the G 20 , including France's Finance Minister François Baroin, his colleague Timothy Geithner, U.S. and EU Monetary Affairs Commissioner Olli Rehn, have already confirmed that the debate over such "leverage". Schäuble, however, denied on all channels, while in reality he is doing just this: The liability framework for the German tax payer, he says several times on Thursday, will not increase - knowing full well that no one has claimed otherwise. On the contrary: The highlight of the "leverage" solution is precisely that this framework would remain formally unchanged.

On Thursday morning there Schäuble in an interview with Germany radio. "I have not used the word" replies Schäuble - what's true and yet not true, because although he has not used the word, but the discussion nonetheless indirectly confirmed: On the question of whether it costs to fund an expansion of the ECB think possible, he said in Washington saying: "There are other forms of leverage."

The fact of the matter is leverage puts more than 211 billion euros of German taxpayer funds at risk and he knows it. He denies using the word "leverage" but he never said it would not happen.

History of Schaeuble Lies

Please consider these Schäuble Flip-Flops courtesy of Google Translate.

21st December 2009
"We Germans can not pay for Greece's problems."

16th March 2010
"Greece has not asked for help, this is why there is no decision, and there is no decision had been taken."

11th April 2010
Four weeks later, on 11 April, he decided to finance the first Euro-Greece-aid package of € 30 billion.

16th April 2010
"We still believe that the Greeks are on the right track and that they may end up not even have to take the help."

22nd April 2010
"The country has had no problems in financing themselves this week in the markets. The agreement on the assistance in an emergency has been a purely preventive measure."

Greece officially asked for help April 23. In early May a rescue package of 110 billion € was in the works.

27th April 2010
"Rescheduling not an issue"

May 2010
The 110 billion euros in the first aid package "ceiling" is a one-time emergency assistance.

21st March 2011
The EU finance ministers decide on a rescue fund with legendary 750 billion euros (ESM) - with the voice Schäuble.

6th June 2011
Greece will receive a new package with more than 100 billion €. Schäuble said: Otherwise, "we face the real risk of the first disordered state of insolvency within the euro zone."

AND WHAT'S NEXT?
Previously, the Finance Minister is on his no to common bonds of all euro countries, the so-called Euro-bonds remained. But perhaps he thinks it is so different again next week .

There is no reason to believe Schaeuble. If perchance he is telling the truth it is by accident. What "accident" might that be? Simple. Greece defaults before Schaeuble commits more German funds.

Merkel Ally Says Greece Better Off Leaving Euro

The deputy leader of the Christian Social Union (CSU), one of three parties in Chancellor Angela Merkel's centre-right coalition, said on Sunday Greece 'may be better off' leaving

The deputy leader of the Christian Social Union (CSU), one of three parties in Chancellor Angela Merkel's centre-right coalition, said today Greece may be better off leaving the euro zone if it cannot restore its fiscal health.

Alexander Dobrindt told Deutschlandfunk radio that a Greek exit from the euro would be a last resort measure and that Greece would find it easier to recover outside the currency bloc.

Ms Merkel, leader of the Christian Democrats (CDU), and Finance Minister Wolfgang Schaeuble have spoken out against Greece leaving the euro zone. Merkel has warned that or a Greek default could trigger a domino effect

The Free Democrats (FDP), the third party in the centre-right coalition, also has spoken out against a Greek exit

But Horst Seehofer, the leader of the arch conservative CSU, has said he could not rule out Greece leaving the euro zone . It is an increasingly popular stance among the German public.

Mr Dobrindt went further than Mr Seehofer in the Deutschlandfunk interview on Sunday, saying he believed that many Greeks themselves would perhaps soon realise their country's fiscal health could be more quickly restored outside the euro zone.

"It's quite possible that it's dawning on Greeks that restructuring their economy outside the euro zone for a limited time period would be easier than inside the euro zone," Mr Dobrindt said. "And that's why we've been saying: it must be possible to leave the euro zone."

By supporting Merkel's "Domino Theory" and by refusing to rule out leverage, Schaeuble is clearly willing to go all in. Whether or not that happens depends on how fast Greece defaults.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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