Today there is a very bad news for Germany: the German bonds sale has today ended in failure! So Germany, welcome aboard!
Today is a very bad auction day for Germany maybe but it could be a good day to Europe because maybe at last, the German chancelor wakes up and realises that Germany is not on the Moon but inside Europe so that the problems of Europe are the problems of Germany and viceversa!
These last days we have seen as markets rejected the bonds od Spain, Italy, even France, and just bought German bonds. So that Germany was paying too little interest while the rest of Europe was paying too much. Byt Angela Merkel instead of thinking about Europe she thought only about Germany and now today we see that was a mistake! While the rest of Europe was on fire but Germany not, Angela Merkel has not done anything serious to handle the European eurocrisis in a European way. Now today, the smoke of the fire in Europe is finally reaching German skies! This is not good news for Germany, of course, but maybe it could be good news for the rest of Europe!
Maybe German politicians realise that if Germany want to remain as a stronge part of Europe first it must get sure that the rest of Europe is not on fire! I agree totally with Angela Merkel that austerity measures must come to south of Europe and all Europe. I am the first to admit that some (not me in particular …) spend more than they could. So I agree with Merkel puuting pressure in Europe to be austere! But there is one thing that Angela has been wrong. And today smoke in German skies (I mean the failure in selling German bonds today) tell all that Germany has done something wrong! The mistake of Angela has been the following: to think that the Germans do all right and the rest do all wrong! Does not she remember the cucumber crisis? Germany blamed Spain. And the Spanish cucumber has not killed anyone! I am afraid Angela did not learn the lesson.
These last days the image of Germany has been awful: Germany has seen as all the rest of the eurozone was on fire and instead of letting the ECB to end once for all this fire Germany has acted in a mistakingly selfish way!: “Well, France, Spain, Italy, Greece are on fire … well, it is their fault … they should be more austere. Germany is Ok and people love our bonds! We even pay less!”
Well, today the markets are also attacking Germany. I am sure that a lot of people around the eurozone won’t be too sad for that. It is bad news for Germany (and for the eurozone) but, who knows, maybe this attack to German bonds is the only way for Germany to wake up and say: “WE ARE IN THE SAME SHIP. SOME COUNTRIES HAVE SPENT MORE THAN NECESSARY AND THEY SHOULD BE AUSTERE. BUT WE ARE IN THE SAME SHIP SO THAT WE ARE GOING TO DO ALL WE CAN TO SAVE THE SHIP. SO WE WILL LET THE ECB TO SAVE THE EURO.”
The problem of Germany is that there is not other country in the eurozone that can make Angela act in a right way. The other countries of the eurozone have not this problem. Maybe some people believe that in the south of Europe is very bad to be austere because Angela says so! Well, I am very happy that Germany says so! Without Germany I wonder what would have happened here! The austerity that Germany asks in not problem (it measn sacrifice but it is for a good cause: to owe less!) The problem is that Germany should trust more the rest of the eurozone! Should I remember Angela that france and Germany were some of the most important countries that did not comply this the stability pact of the euro? How could the south of Europe respect the stability pact when even Germany did what it wanted?
How can the markets show confidence for the eurozone when even Germany shows no confidence for the euro? Why Germany does not want the eurobonds? Well, because it does not trust the other members strength to improve things.
Well, today Germany is paying the price of not showing confindence in the eurozone. Now the markets are also starting to not show confidence with Germany.
2011 may be remeber as the year that Germany made two mistakes: it did not trust the south of europe (cucumber crisis) and it did not trust the south of Europe (eurocrisis).
The fact that Germany is the most powerful country of EU economies does not mean that it is always right. I wished the cucumber had made that clear to Angela.
Anyway, we are still at a time to save the euro. If German let the eurobonds be a reality maybe the eurobonds would have problems too but at least we could be all united. The attack to the German bonds is a clear sign that things have not been done properly these last months in Berlin.
- Germany’s Econ Min Strongly Reaffirms Opposition To Eurobonds (forexlive.com)
- Eurozone crisis: two charts that will frighten Angela Merkel (guardian.co.uk)
- This Is Probably What Sparked That Rumor About Germany Warming To Eurobonds (businessinsider.com)
- Germany’s auction flop adds to European debt fears (sfgate.com)
- Germany’s surprisingly weak bond auction worries analysts (usatoday.com)
- Buyers Of German Bonds Finally Pulled Out Their Calculators (zerohedge.com)
- Germany suffers “disaster” at bond auction (telegraph.co.uk)
- Germany – the only first class passenger on the Titanic? (ftalphaville.ft.com)