The Bundebank’s vice-president Sabine Lautenschlaeger hammered home the point in what is a clearly co-ordinated push to kill the plan. “The result would be a pooling of the governments’ liabilities through the back door,” she said. Photo: Alamy
The German Bundesbank has joined with Great Britain to not support an European Union banking union. Although this was not unexpected, the timing comes right before the Greek elections on Sunday.
The Spanish bailout has been confirmed but not one country or bank has actually signed on contractually, no details have been given and no time frame has been outlined. The dominoes are starting to fall in Europe but all is well in New York as the stock market was up another 162 points on low volume. At least the volume on GLD was up 15% today. Then again, the silver ETF (SLV) had a drop in volume of 16% today.
Maybe Ben Bernanke will be able to shed some perspective on this developing economic collapse tomorrow.
Germany’s central bank has shot down EU proposals for a European banking union, warning categorically that eurozone liabilities cannot be shared without a fundamental shift towards fiscal and political union.
Andreas Dombret, a key board member of the Bundesbank, said the grand plan by Brussels is unworkable. “It has to follow a deeper fiscal union as it would imply significantly increased risk sharing amongst countries.”
Mr Dombret said a pan-EMU deposit-guarantee scheme and a debt resolution fund would require “a genuine, democratically legitimated fiscal union” and a new treaty.
The Bundebank’s vice-president Sabine Lautenschlaeger hammered home the point in what is a clearly co-ordinated push to kill the plan. “The result would be a pooling of the governments’ liabilities through the back door,” she said.
“Whoever is footing the bill must also have a right of control, particularly when it comes to the large sums that are seen in banking crises,” she added, alluding to rulings by German courts that unquantifiable EU liabilities breach Germany’s constitution.
Chancellor Angela Merkel endorsed the tough line at a party conference yesterday, insisting that Germany will not accept variants of debt pooling or eurobonds until Europe has created a machinery of joint government.
“We can’t take part in things that lead us into an even deeper disaster,” she said. “We want more Europe, but a Europe in which joint liability and joint control go hand in hand. What is not acceptable is shared liability and control remaining in national hands.”