North Rhine-Westphalia’s election

Rhine scold

Mrs Merkel suffers a bad day at the polls in a key election

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@Make Love

I share your feelings, even though I’m not German. With hindsight it would have been better to stay out of a “destiny-collective” whereby some only joined to be “saved” from their foreseeable own destiny by counting on the prudence of others.

I was also annoyed about the Greek bail-out and advocated a planned default with a restructuring plan at hand. This would have meant some billions lost for German banks, but still a better solution than financing Greece’s extravagances continuously; and, I think, it would have been better for the Greek people too, as they could have made a “fresh start” with much less debt and less interest to pay.

But as we know that didn't happen for various reason, they all were politically motivated and not economically. Yes, and I think that Mrs Merkel was probably the best choice around; great leaders are scarce. Who -from the available bunch- would be truly a better alternative for the German people?

Merkel is fairly honest and loves her country. That she grew up in the East is rather an asset than a deficit … and what is most important, she has a very rational mind as a quantum physicist: I’m personally fed up with all those MBAers running our economies against the wall.

She tried hard to convince the others that only ‘aiding’ can’t be the solution. It was not her failure alone that she failed to deliver her promise. She was under tremendous pressure from within her own party, from Germany's media, from the “Club Med” (headed by France) … and maybe (almost surely) from the lending German banks too. But she gave them all a good run for their money.

I wouldn’t have liked to be in her shoes. But one fact is clear to me: To provide Greece “quickly” with "one drop only" (as the original €30bn was) would have been the worst scenario of all.

We all know now that -without a comprehensive solution- this would have been just up for ongoing repetition whenever the next debt-roll-over due day neared . . . endlessly. Meanwhile the markets wouldn’t have let their prey go, knowing that such an economic uncertainty only gives an unlimited chance to charge high interests - paid for Greece (and others) continuously by the more prudent euro members.

Realistically would the preferable choice have been for Germany to leave the eurozone “in a sudden”, but this is not possible since the roll back needs huge logistic preparations which cannot be met in a month. Plus: Germany has a very interlinked economy with Holland and Austria. To move without them could have been a “shock” for the German economy of incalculable dimensions.

This now is more or less a roadmap in case the concerned countries can’t find (back) to the "road of competitiveness and prosperity". This might take several years. But meanwhile they are under a protecting umbrella that buys them some time to restructure their economies.

They markets can’t attack the euro’s weakest members anymore; which -if it would dragged on- would have brought down even the stronger euro economies. Germany is not the resource-rich U.S. … with still open lands as far one can see. Therefore it needs its neighbours … or will draw conflicts. This didn’t change since the 19th century.

Germany’s taxpayers don’t have to foot the bill at this stage, most likely never. This agreed emergency sceneario would only be applicable if those countries really would default after all. This might be true for Greece, but I doubt that Spain or Portugal are default candidates under this new scheme.

It will be the interbanks buying their bonds respectively their IOUs, guaranteed by their respective governments - proportionally to their ECB share. They (the interbanks) in return can cash those bonds/IOUs in at the ECB for discount cash. Thus, those banks will have a profit, but not near as much as if it would be left to the markets.

I strongly believe that this crisis will fix some major flaws of the euro, and the euro will eventually become intrinsically stronger than it was ever before. And I’m pretty sure that almost nothing of this “1 trillion” will be really needed by the end of the day.

Important for now was only to take the weakened economies out of the firing line of the global markets to allow them “to breath” again and restructure without the "death halloo" of the game driving speculator’s press.

Just stay calm and watch, it’ll be all right. Though there is no reason to ‘jump’ on the euro right now, but a ‘hold’ position would be the appropriate measurement in this situation.


Pardon me? Did you even read the article?
If you had, you would have noticed that party that lost most in the election (FDP) was center-right, and advocate of lower taxes. The party that gained most was the Greens, hardly an anti-statist, low taxes 'Tea Party' type movement.
Even the election in the UK was by no means a resounding victory for the Tories.
So, there has been no internationalization of the Tea Party movement. Perhaps you should confine your attention to the elections in Utah, not the more subtle results in other parts of the world.


I'm appalled to live in a country that so blatantly puts the outcome of a provincial election in Germany over the stability of the EU. Action has been necessary for weeks now and just as long it has been clear that Angela Merkel put off any help to Greece for no reason other than that one election.

The damage done cannot be assessed yet. But in fact it doesn't matter. What matters is that we are ruled by politicians who do not understand their responsibilities. I don't see how this can change. I'm afraid, saying that we're doomed is not too far fetched.

As for the bail-out package:

950bn dollar correspond to 6.3% of EU GDP, but the IMF share (about 50%) will be spread out over 3 years, basically reducing the whole package to 3-4% of GDP.

Stock-markets are ecstatic, bank shares rose most of all.
Qui bono? Your call.

The long and the short of it is: Those measures are neither quantitatively nor qualitatively appropriate. What is needed is a balanced European economy, where countries can enjoy the benefits of a shared market and are not reduced to either produce and export (read Germany), or consume and import (read PIIGS).


The Greek crisis has developed into a eurozone crisis because policymakers have remained reactive rather than proactive in dealing with the fundamental risks exposed by the potential failure of a member state's economy.

That Greece represents only 3% of the eurozone economy should give little reassurance. There needs to be a comprehensive review of the way in which countries can be held to account for "creative accounting" and huge divergence from the Maastricht Criteria.

I outlined a few of the key risks in a feature in March and it gives me no pleasure to suggest that the failure to address these concerns have been among the main reasons for the continuation of the current crisis and spell danger for the future cohesion of the union:


Mrs Merkel will suffer a lot more bad days in the future. She has lost touch to her traditional voters, the middle class.
Many people are just dissatisfied with the political and economic situation in Germany. In the absence of serious alternatives the high number of non voters is not really surprising.

Alas, it's the average earner who has to pay for Mrs Merkel's generosity towards the EU.


It is a pity, that no party in Germany or Europe in general is campaigning against the bail-out and rescue programme. I'm also very disappointed that there is so little economic and political debate about the pros and cons of this policy. It seems that our political leaders rush forward without taking themselves the time to think it through.
It reminds me very much at the GDR time, where you could hear the same statements like today: "There is no other way..., It is absolute imperative to prevent the hostile attacks..., There is no alternative to our way..."

Artemio Cruz

The campaign itself was very poor with the CDU seeming to focus solely on Jürgen Rüttgers. But there is no doubt that the fallout from the disastrous start by the Berlin coalition is responsible for the collapse in CDU/FDP support - most people preferred to stay at home rather than vote for another party. In a sense it is a pity as while the government didn't actually do much it did modernise itself a lot with the very first immigration minister actively addressing an issue that until 2000 didn't exist for the CDU - Manfred Kanter's famous description of Germany as "not a land of immigration" typical of the traditional view.

Guido Westerwelle has made the worst start as Foreign Minister that I can remember. Whining on about tax cuts does not befit the position. Add to that that no one thinks there is the money for them, and despite the Economist's position that Germany needs tax cuts, Germany's *tax* position isn't that bad in comparison with other countries.

Merkel has dithered ever since she took office, seeking to ride the wave of consensus. This strategy worked well with the SPD doing the dirty jobs in the government but has left her hostage to fortune with the extremer voices of the FDP and CSU pulling the governing coalition in different directions. The rank and file of the CDU is now starting to question the wisdom of this approach with conservatives like Wolfgang Bosbach becoming more or less openly critical. A move to the right of the CDU seems more or less inevitable in the run up to next year's elections as Merkel will seek to maintain power at the expense of the FDP. She's probably more than happy that FDP has lost support as it should make them more malleable over time.

In the meantime it means an end to the debate about nuclear debate - there is no way that the existing law will be changed by the parliament now which means quite a few reactors will have been shutdown by the next election. And a chance for the SPD to reoccupy the centre of left position that Merkel has successfully held for the past few years. The Left party will remain a problem but nothing like as severe a one for a party in opposition. The extremely volatile NRW grouping may well be the first one to self-destruct.

The FDP is going to have to rediscover that liberalism means more than just tax cuts but time is running out for them as the Greens get more and more established as their voters get older.


From the Utah republican caucus to the UK and now to NRW , the people are speaking :we are tired of the same tired bromides offered by careerist politicians .Tired of statist "solutions" that only make the problem worse . No more bailouts for Greece , GM or Wall Street .And no more taxes to fund the next solution that only worsens the problem .The MSM has conveniently forgotten what Tea Party means :Taxed Enough Already (and for what ?)


Merkel's day wasn't that bad:

- her FDP coalition partners are now weak, will have to pipe down, and can forget their tax cut and other annoyingly silly demands
- the SPD didn't get increased support
- a lot of the CDU loses were due to the personal lose of credibility of Röttgers, who has now resigned. Another inner party rival bites the dust.


German taxpayers will turn on Merkel. So will politicans who will use her as an example of what Germans dont want. Very bad signs ahead for politiks.

Fulle of skye

Through this whole crisis, so many commentators here and elsewhere have said, don't bail out the banks. While they should not be rewarded for mistakes, no Government could let a big commercial/savings bank go under. If the Government even got their timing wrong by a day and one failed, most of a country's banking system would freeze. Any gutschrift, credit cards, cheques would not be honoured, till someone worked out the liabilites, no ATMs would be restocked, pensions would not go through etc, because an insolvency triggers massive legal complications due to all the banks being interconnected. The bank the gives you your credit card might not be the one that pays the shop and your ATM could be stocked by another bank.
What this means is don't bail them out is fine, till you cannot buy groceries to feed your children. It is a lousy outcome but the desire to punish should not cloud judgement for the size of the problem and the difficulty governments face.


Fulle of skye - Spoken like a true banker. Use the "feeding the kids" story to justify the failure of landesbanks. My heart bleeds.

Next, is for these banks to go under. Because the size of the bailout was not enough and they continue to make loans. Who will be the new kredistalt? LBBW? Bayern? HSH? Sachsen?


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