+++ 11. Juli 2012 +++
Germany at the Center of Resistance to ESM
Six legal challenges to the ESM and fiscal pact have been filed at the German Constitutional Court, and the first public hearing on the injunctions attached to some of them is taking place today, July 10, with a ruling is expected either on the same day, or soon after. A ruling on the merits of the challenges as such may take several weeks, if not months, during which time the euro system will continue to disintegrate, at an accelerating pace, fueling popular discontent. On July 2, Wilhelm Hankel and Karl Albrecht Schachtschneider, two of the "4 anti-euro professors", elaborated at a press conference in Berlin the legal complaint they have filed at the Constitutional Court together with the Free Voters party, and strongly attacked the bailout policy. Hankel called the ESM a monster, unprecedented in the world, whose capital base is 140 times larger than that of the ECB, 80 times larger than that of the Bundesbank, and 50 times larger than that of Europe's biggest bank, Deutsche Bank. That will absorb all available capital for the bailouts, leaving nothing for public sector loans, the municipalities, the creation of youth jobs, or firms.
In addition to bleeding Europe's real economy, this is also an attack on democratic rule, as the ESM is explicitly placed above and beyond the democratic institutions of Europe. Hankel mentioned IMF director Christine Lagarde as an example of leading leaders’ disregard of constitutionality: at a recent meeting in Washington, she said if she heard the German Constitutional Court mentioned again, she would leave the room right away.
Then, on July 5, 172 German economists put out a public declaration denouncing the ESM and calling on citizens to mobilize nationwide. Initiated by Prof. Hans-Werner Sinn, president of the Munich ifo-institute, the appeal has been signed by numerous "heavyweights" in the world of economics, such as Prof. Klaus Zimmermann, former head of the German Institute for Economic Research (DIW), Freiburg economist Prof. Bernd Raffelhüschen, and Dortmund Statistics Prof. Walter Krämer. Crafted in remarkably non-academic language in order to have a broad public impact, the appeal asserts that the planned European banking union will only "help Wall Street, the City of London – as well as some investors in Germany – and a bunch of domestic and foreign banks... They thus can continue their business at the expense of citizens in other countries, who have little to do with this." A banking union, the professors correctly point out, means "collective liability for the debts of the euro system," adding that "bank debts are almost three times as large as the sovereign debt and, in the five crisis countries, lie in the range of several trillion euros." Taxpayers, pensioners and savers of the still solid countries "cannot be held liable for covering these losses," the declaration states, demanding that "banks must be allowed to fail. If the debtors cannot pay back, there is only one group, which should take on the burden and is able to do so: the creditors themselves, since they entered the investment risk consciously and they are the only ones who have the needed wealth."
The appeal falls short of calling for Glass-Steagall legislation, but it does have the potential to build into it.
Moreover, on July 8, German President Joachim Gauck said in a nationally-televised interview that he thought the Chancellor had "a duty to explain in a very detailed way what the policies designed to save the single currency meant for the average person, and what they mean fiscally." Referring to the Constitutional Court's June 19 ruling (cf. SAS 26/12), Gauck added that Merkel has the duty to inform the Bundestag in detail on what was really decided at the June 28, EU summit. He also said he was "pleased" that the highest court would soon consider challenges to the ESM and fiscal pact.
~ deutsch + english ~
+++ 24. Mai 2013 +++
Pope Francis Calls for Financial Reform
Two months after his election, Pope Francis has spoken out forcefully against the dictatorship of the financial markets, which is reducing humanity to misery. Speaking in front of the ambassadors of K...
+++ 24. Mai 2013 +++
Bundestag Passes Phoney "Bank Separation" Law
On May 17, the German Bundestag passed a bank restructuring bill touted by the government as the "first bank separation law passed in Europe." In fact, the law is a far cry from what the government cl...