Is Germany Preparing a European Power Play?
Posted by Larry Doyle on November 17, 2011 10:36 AM |
What will be the end game for the European Union? Clearly the EU will not and cannot maintain the status quo.
With contagion clearly spreading throughout the EU and by extension the global economy, the stakes within the EU are raised almost on a daily basis. Where will this end up?
Who knows but what we do know is that the “road to perdition” or some form of “extended purgatory” will ultimately run not through Brussels, nor London, nor Paris, nor Athens, nor Rome but through the German capital of Berlin.
What are the Germans thinking? What might they have in store?
To give credit where it is due, I thank a fellow Seeking Alpha contributing writer James Kostohryz for unearthing a recent article in the Spanish press which addresses the behind the scenes work ongoing within Berlin which would seem to indicate that German Prime Minister Angela Merkel and her colleagues are poised to make a major power play within the governance of the European Central Bank.
Might this power play unfold? How might it impact the immediate economic situation within the EU and by extension the world at large? Let’s navigate and get Kostohryz’ take as he writes,
A good friend of mine who works at the finance ministry of one of Europe’s major economies sent me an article in the Spanish press over the weekend that sent shivers down my spine. According to confidential sources – and given credence by my friend – Germany is preparing a radical assault on ECB governance.
If the sources are accurate, it is my view that this assault on ECB governance is merely one step in a German grand strategy to radically restructure the euro and/or pave the way for a German exit from it.
This story published on Saturday gains a great deal of credence after Merkel ratcheted up the pressure today at her party (CDU) conference for a “breakthrough to a New Europe” characterized by closer political ties, tighter budget rules and less individual sovereignty for member states. Merkel said that the European Union needs to develop new structures – and that would mean more Europe, not less.
According to the cited article from the Spanish press, at the next EU summit on December 9, Germany will propose a series of reforms to the “Treaty of Berlin” aimed at creating a much more unified governance of European economies. According to the article, the CDU is preparing a resolution that calls for a reform of EU laws to make the vote of each member state proportionate to its GDP. This would guarantee German supremacy within the ECB and would allow it to dictate policy to all 17 eurozone nations.
Germany apparently wants to capitalize on the fact that the bailout mechanisms introduced so far are clearly inadequate. In exchange for one-off support on various extended bailout measures, the Germans want new governance rules to recognize German supremacy within the European Union.
What if the power play does not work? What if the other nations resist this move by the Germans? Then what? Might the EU break apart? Might the Germans actually leave the EU? Would they go that far? Will this force certain nations out of the EU? What happens to the Euro itself?
What a tangled web we weave?
Stay tuned ….but in the meantime, make sure you read and review, Report: Germans About to Launch Bomb Within Heart of Europe.
I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.