My new best hero - Jens Weidmann

Alright, I know he doesn't look like Superman or James Bond but he is the 'real deal', the man who is going to save the world, or at least, the European bit of it!

Photo DPA

He is, of course, the President of the Bundesbanke and rather like his brave predecessors who fought so tenaciously to hold back the Soviet armies in 1944/5 he is conducting what must seem to him to be a single-handed battle to keep the Euro-pols honest.  According to Der Spiegel:

Politicians still hadn't done their homework, the Bundesbank president said critically. He assigned the blame for the crisis of confidence in the euro zone to politicians and said that they were jeopardizing the central bank's independent position. And then came the statement without which no German monetary watchdog can complete an appearance. The ECB, Weidmann said, has only one purpose, namely "to keep prices stable."

He has taken on not only just about every political leader in Europe - and Obama in the States - but also many of his collegues who sit on the board of the ECB by refusing to allow the ECB to buy up anything but a minimum amount of national bonds issued by the likes of Greece and Italy.  Part of the reason why the Italian government succumbed to market pressure last week was because the ECB only bought a derisory amount of Italian bonds in a futile attempt to keep the yield below 7%.  However, even changing governments is beginning to look as futile as the sticking-plaster remedies tried so far because yesterday the markets moved ominously against not only 'the usual suspects' but also, as The WSJ reports, against Austria, the Netherlands, Finland and France!

For months, a worst-case scenario of European policy makers has been that the crisis, born in heavily indebted countries, would infect otherwise healthy countries at the heart of the monetary union. Tuesday's trading suggests that could now be happening. If investors go on a buyers strike of European debt, that could raise borrowing costs, and eventually threaten the solvency of much of the euro zone.

However, our brave new hero is not only faced with a fight to his front against the massed ranks of the Euro-pols but also to his rear from his own leader, 'Kaiserin' Merkel, herself!  She has dithered consistently since this calamity first began but having seen for herself that sticking-plaster solutions simply are not working she has, according to another story in Der Spiegel, taken a truly momentous decision.  She intends to change that Holy of Holies to the German people, the Constituion, otherwise known as The Basic Law.  The purpose is to move the euro-zone countries into a single financial area:  

Now, it looks as if Merkel herself may order an overhaul of the German constitution. At the party conference of the chancellor's conservative Christian Democratic Union (CDU) which commenced on Monday morning, Nov. 14, it is expected to approve a plan that could change the face of Europe -- and perhaps make it necessary for the Germans to rewrite their constitution.  

This operation to amend the constitution has already become one of the government's most delicate political initiatives. If it succeeds, it would remove one of the euro's biggest problems: The 17 euro-zone countries have a common currency but do not have a common finance policy, a fact which partly explains why the euro is teetering at the edge of an abyss. This is tackled in the key sentence of the new paper. "We need more Europe in key policy areas," it says.

If she succeeds, Europe will be changed irrevocably.  She intends to impliment her policy in two stages:

As a first step, they want to amend EU treaties to allow notorious debtors in the euro zone to be placed under mandatory supervision by Brussels. [My emphasis]  They aim to make the Stability Pact more binding in the future. That would mean the European Court of Justice could take action against budget offenders. If necessary, even a Brussels cost-cutting commissioner would be able to keep budget offenders on a short leash.

'Ve haf veys of making you behave'!

As a second step, Merkel and Schäuble want the EU to move towards becoming a political union. This entails transferring more sovereign rights to the EU -- and it would mean amending Germany's constitution. This could either be accomplished under Article 23, requiring a two-thirds majority in Germany's federal parliament, the Bundestag, as well as the Bundesrat, the upper legislative chamber that represents the states -- or, as a more challenging alternative, under Article 146 of the constitution, in other words, through direct participation by the people. Article 146 is a tool that allows for the drafting of a new constitution following a national referendum.  [My emphasis]

Got in Himmel!  A German referendum on Europe?  'Dave' won't like that if it happens because there is no way that he could then refuse one here.  Incidentally, I notice that 'Irrelevant Dave' has gone off round Europe to give the benefit his opinion to 'Merkozy & Co', none of whom will be the slightest bit interested.  In fact they are more than likely to have their existing irritation with Britain increased by receiving unwanted advice from their 'semi-detached' neighbour.  Gideon Rachman of The FT points to yet another example of anti-British feeling throughout Europe when he attended some 'European 'gabfest' attended by 'the Great and Good of the Project': 

I was surprised by how much anger there was directed at Britain.  This seemed a bit odd to me, given that Britain did not cause this crisis and is not part of the euro-group.  But there was much denunciation of us, for not taking part in the bail-outs, for blocking a transaction tax and for generally being a haughty pain in the neck.

Well, I am even more surprised that a seasoned observer like Gideon Rachman is surprised at European hostility.  I never get to attend all these grand meetings held here and there in the capital cities of Europe but I realised long ago that dislike of the British (and the Americans) is endemic across Europe.  I don't blame them, I don't like the Brits all that much either, but surely the insiders must recognise it and take it into account.  I mean, 'Irrelevent Dave' surely doesn't think he can use his Old Etonian charm on 'Merkozy' to any effect.

Anyway, in this particular Danse Macabre the music is playing faster and faster and soon it must end with a crashing, smashing, finale - take cover!  And in the meantime, let us send out very best wishes to my new Aryan hero, Jens Weidmann: Kampf gut, mein Freund!

 

Comments

[Umbongo]

As long as he doesn't have to do anything requiring some backbone Cameron will say anything that springs to mind. He has all the inner steel of a bathsponge.

When Mrs T was swinging her handbag in Europe in the 80s she was acting from policy based on clear principle. Any policy of Cameron's is based on the principle that whatever will get him a boost in the polls and, with any luck, get him reelected is good. Such "principle" could turn tomorrow into a massive cheque to the eurozone (paid for by you and me) plus an admission that (for purposes to be disclosed at a later date) the FTT will be signed up to by the boy-chancellor.

As an example of the fatal weakness of our rulers, Clegg has already stated that now http://www.telegraph.co.uk/news/politics/nick-clegg/8890843/Nick-Clegg-warns-European-in-fighting-will-play-into-hands-of-chauvinists.html is not the time to extract anything from the EU in return for British help. In other words, Cameron's partners are prepared to give away all our bargaining chips before the cards are even dealt: Clegg must be taking advice on negotiating tactics from the FO.

[dearieme]

I'm not surprised by the hostility. Get the troops home and get 'em home now.

[David Duff]

Thanks for the link, Bongers, which provides yet another proof that Clegg is both a fool and a knave!

[Lawrence Duff]

I think you need a new best hero after your last one, Herman Cain, went down in a hail of fanny-fiddling accusations and brain-fog!

Is this the legendary "Curse of Duff" at work again, I wonder? ;-)

SoD

[David Duff]

It certainly is and let me tell you that it is passed down in my genes!

[H]

If you sign up to a single currency, you either stay solvent or you lose your sovereignty. Not so very different from being on the gold standard, really.

Greece & co. have decided to sign away their sovereignty - for the moment - but what happens when (not if) they want it back?

For the historically minded, Egypt fell under British control because British (and French) bond holders demanded repayment and the local government was unable to oblige. Harsh measures were taken under the aegis of Lord Cromer (of the Baring family) to extract the necessary funds. Not coincidentally, Egypt is one of the former imperial possessions where the British were most disliked (in so far as it's possible to judge these things).

Have fun bearing the white man's burden, Frau Merkel.

[Andrew Duffin]

"...policy of Cameron's is based on the principle that whatever will get him a boost in the polls and, with any luck, get him reelected is good."

Hard to believe this, actually.

If he wanted to get elected (last time) with a massive majority, all he had to do was show a bit of spine over the EU.

He didn't, so clearly that is NOT his priority.

Next time, of course, nobody will believe a word he says, so he's doomed.

Couldn't happen to a nicer fella.

But what hideous damage will he do to us in the meantime?

[David Duff]

"what happens when (not if) they want it back?"

Ay, there's the rub, 'H'.

I suspect, Andrew, that 'Dave' thought that given 'Psycho Brown's shambles he was going to sweep into power without having to carry a heavy load of Tory baggage. Wrong then, and still wrong!

[Umbongo]

H and DD

Cameron's priority on becoming leader of the Conservatives was to rid the Conservative "brand" of the toxicity of being "nasty". This diagnosis of the reason for electoral failure resulted in treatment to dump the policies supported by and any potential MPs from the so-called right wing of the party (which comprised both the traditionalist and Thatcherite wings). This meant that a putative Cameroon administration would remain a fan of the EU and supportive of the euro not to mention all the other statist rubbish which Cameron believed would convince the electorate that here was a new, refreshed and "listening" Conservative Party.

Acccordingly he rode into the 2010 election at the head of a ragbag of liberal (in the US sense) and quasi-Blairite apparatchiks dragging behind them a reluctant wagon-train of genuinely conservative constituency workers. What happened? Against the worst administration since Lord Liverpool and, possibly, the worst PM ever, he failed to get a majority in the Commons. This is failure of galactic proportions.

Unlike H I consider that Cameron thought (and thinks) a constructive (rather than combative) reengagement with the EU was/is a vote-winner. Not only that, I predict a return from Berchtesgaden (or Berlin or wherever he's meeting Merkel) with another piece of paper ensuring peace not in our time but until next week but a sell-out all the same.

[David Duff]

Christ, 'Bongers', it's being so cheerful keeps you so young! Can't fault your reasoning - unfortunately.

[Umbongo]

DD

Blimey! You AND Mrs U have said the same thing to me within an hour of each other. She denies it but I fear you've been talking behind my back. So not only "cheerful" but paranoid.

[David Duff]

Sound gal, that Mrs 'Bongers'!