German Parliament Approves Expanded Bailout Fund
The coalition of German Chancellor Angela Merkel approved the expansion of Europe’s bailout fund September 29, meaning that the measures passed without Merkel having to rely on votes from opposition parties. If 19 members of Chancellor Merkel’s coalition had voted no, the coalition could have collapsed and the country forced to early elections.
Instead, 13 voted no and 2 abstained. Still, events in Germany continue to build toward a political crisis.
German Finance Minister Wolfgang Schäuble promised parliament that Germany would not support any plan to “leverage” the eurozone’s bailout mechanism, the European Financial Stability Facility (efsf). Leader of the Christian Social Union Horst Seehofer said that the csu would go “this far and no further.”
Germany’s Constitutional Court has made similar statements, saying that Germany has gone about as far toward European union as its constitution allows. To go further, Germany must hold a referendum, head of the court Andreas Vosskuhle said.
Yet Germany has not gone far enough. Economists say that the markets seem to be acting on the assumption that European leaders have already agreed to go further, and that the German parliament has been deceived.
American think tank Stratfor believes the only way for the euro to be saved is for Greece to leave, or be pushed out. It estimates that €2 trillion would be needed to deal with the fallout. The efsf isn’t big enough.
Germany is looking like an immovable object. It must do more for the crisis to be solved, but the people, court and politicians have had enough.
The Telegraph’s international business editor Ambrose Evans-Pritchard believes this means the end of Europe’s march toward a superstate. “THERE WILL BE NO FISCAL UNION,” he writes, in all caps. “THERE WILL BE NO DEBT POOL. THERE WILL BE NO EU TREASURY.”
He is wrong. The euro crisis was inevitable—the currency union in its current form cannot work. The elites behind it knew it would fail. It was designed to force Europe to pull closer together. They won’t let the EU fall apart, no matter what the demos in Germany say.
But in most of his analysis, Evans-Pritchard is right. “Germans have begun to sense that the preservation of their own democracy and rule of law is in conflict with demands from Europe,” he writes. “They must choose one or the other.”
Germany is getting fed up with handing over cash. That means there will be a higher price for the cash—more power surrendered to Germany. As times get more desperate, the countries in need will pay this price.
Meanwhile, the economic crisis is creating political crisis in Germany. It may turn those in the current German government into liars—giving more cash when they’ve said they won’t. This could cause a radical shift in German politics.
At the start of the year, Trumpet editor in chief Gerald Flurry wrote: “Germany will use this crisis to force Europe to unite more tightly. In the process, some eurozone countries will be forced out of the union. When that happens, the pundits will say European unification is dead, that the European Union has failed. Don’t listen to them!
“Every country that leaves the EU puts us one step closer to seeing the German-led 10-nation European superstate!”
Watch for this prediction to come true.