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Sunday, May 09, 2010 2:04 PM

Euro Witch Hunt Escalates; Obama on the Hotline to Angela Merkel; France, Germany "Completely Agree" (Except for German Voters)

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The news is flying once again today, and all eyes are the results of a meeting that will send a coordinated "message to the market".

The meeting was interrupted when German Finance Minister Wolfgang Schäuble had an "adverse reaction to medication" and had to be take to the hospital.

I think a more likely explanation is a stress related nervous breakdown. Hmmm. Will that statement make me a witch hunt target?

Euro Witch Hunt Escalates

You know someone or something is in deep trouble when the search for scapegoats happens in the middle of a crisis rather than after it has ended. With that in mind, please consider EU's Barnier Calls For Tougher Sanctions On Market Speculators.

The European Union's internal market commissioner Sunday called for tougher sanctions on stockmarket speculators.

Speaking on French radio Europe 1, Michel Barnier said sanctions against speculators will take various forms "including legal action, when there is proof." "We are ready to increase the sanctions against abnormal speculative action," he said.

"Regulatory authorities need to be extremely severe with those that are launching rumors to manipulate stock prices in order to make money on the back of the suffering of the people," Barnier said.
Is that lame or what?

IMF approves $40 Billion Greece Bailout

Today we learn the IMF finally got its act together to approve $40B Greece bailout.
The board of the International Monetary Fund has approved its part of a $140 billion bailout package for Greece.

The board met in Washington Sunday to approve a three-year, $40 billion (euro30 billion) loan for the troubled European nation. Greece has enacted broad cutbacks on government spending to address its mounting debt, sparking riots and social unrest.

Eurozone leaders on Saturday approved a $100 billion package of loans to Greece for the next three years to keep it from imploding. The bailouts are an effort to stabilize global markets rocked last week by fears of a spreading European debt crisis.
Obama's On The Hotline

This will not do a bit of good but Obama calls Merkel on debt crisis
US President Barack Obama spoke to German Chancellor Angela Merkel for the second time in three days Sunday and pressed for "resolute" EU steps to build market confidence, the White House said.

"President Barack Obama spoke with Chancellor Merkel this morning as part of his ongoing engagement with regard to the economic situation there," White House deputy spokesman Bill Burton told reporters here.

"They discussed the importance of the members of the European Union taking resolute steps to build confidence in the market."
The conversation went something like this. ... Hello Chancellor Merkel, the dollar is rising in spite of our best efforts to kill it. Please do something!

That is my intrepretation of this official quote: "We agreed on the importance of a strong policy response by the affected countries and a strong financial response from the international community."

France, Germany in "Complete Agreement"

Reuters reports France, Germany agree on EU measures
France and Germany "completely" agree on the measures to be unveiled on Sunday by the Ecofin group of EU finance ministers to help solve the crisis-hit euro zone, the French presidency said.
Complete Agreement? Excuse me for asking but what do German voters think?

Merkel’s Party Defeated in Key State Election

To show how ridiculous the statements from the French president are, please consider Merkel’s CDU Defeated in Key State Election.
Chancellor Angela Merkel’s party unexpectedly lost control of Germany’s most populous state in a regional election, television projections showed, potentially swinging the balance of power in Berlin and dealing Merkel a blow after criticism of her handling of the Greek crisis.

Merkel’s Christian Democratic Union, or CDU, took 34.3 percent in today’s election in North Rhine-Westphalia, and the opposition Social Democrats 34.7 percent, latest projections showed. The Greens took 12.3 percent, the Free Democrats 6.7 percent and the Left Party 5.7 percent, enough to win seats in the state parliament in Dusseldorf for the first time.

The results may give the Social Democrats and Greens a slim majority, ending the CDU-led coalition that has governed North Rhine-Westphalia, or NRW, since 2005. That would cost Merkel her majority in the upper house of parliament in Berlin, where Germany’s 16 states are represented.

“This is a double blow to confidence in Merkel’s party: a rout at regional level that’s sent a huge wave to the national coalition,” Hans-Juergen Hoffmann, managing director of Berlin- based polling company Psephos, said in an interview. “Her own bedrock CDU voters are worried. The crisis is spinning out of control and confidence in her ability to tame it is evaporating.”
That is what happens when you override the will of the people. Eventually they get fed up. I am hoping US voters are equally fed up with Obama, enough to cause him a severe pounding in the November mid-term elections.

Adverse Reaction To Medication

Hoping to send a "clear message to the financial markets" all 27 EU finance ministers were summoned to a crisis meeting in Brussels. The EU crisis meeting was disrupted when German finance minister was rushed to the hospital, reportedly due to an "adverse reaction to medication".
Wolfgang Schäuble was taken to hospital in Brussels shortly after arrival for the meeting. He is reportedly suffering from an adverse reaction to medication.

He will be replaced by Thomas de Maiziere, who is currently Germany's interior minister but was for four years the head of the private office of Chancellor Angela Merkel.

The EU's finance ministers were called to Brussels today to approve the creation of a ‘European stabilisation fund' capable of providing emergency funding to countries unable to raise money on the capital markets at sustainable levels of interest.

The €70 billion fund was agreed by national leaders from the 16 members of the eurozone on Friday (7 May), but it needs the endorsement of the EU's 27 member states.

The decision to call the EU's finance ministers together less than 48 hours after the end of the emergency summit reflected a desire to send a clear message to financial markets before they opened on Monday that the EU was determined to shield the euro.
Darling Says UK Cannot Support EU Stability Fund
Inquiring minds are reading Britain cannot support EU stability fund

Chancellor of the Exchequer Alistair Darling said Sunday that Britain cannot and will not support a European Union bailout fund to help struggling eurozone economies.

"I'm very, very clear that if there's a proposal to create a stability fund for the euro, that's got to be a matter for the eurogroup countries," he told Sky News television in Brussels, where he was attending an EU meeting.

"What we will not do and what we can't do is provide support for the euro... the responsibility for supporting the euro must be for the eurogroup members".
That is in contrast to the idea that the UK would be forced into bailing out the Euro on the basis of Lisbon Treaty agreements. Please see UK Taxpayers Ramrodded Into EU Bailout; Good Riddance to "Clown" Brown for details.

Crisis Recap

  • 48 hours ago there was an emergency summit to discuss the European financial crisis.
  • A second crisis meeting was held Sunday.
  • Germany and France are in "Compete Agreement" except that German voters obviously are not.
  • In a vote showing no-confidence, German Chancellor Angela Merkel's CDU party unexpectedly lost control of Germany’s most populous state as well as her majority in the upper house of parliament.
  • German Finance Minister Wolfgang Schäuble had an "adverse reaction" to something, reportedly medication.
  • 27 finance ministers want to send a "message to the markets", that the people of Germany do not agree with
  • A witch hunt is on to lay the blame for this crisis on speculators
  • Lisbon Treaty agreements or not Chancellor of the Exchequer Alistair Darling said that Britain cannot and will not support a European Union bailout fund

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Mike "Mish" Shedlock
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