Maybe I am exaggerating 100% when I say that I support Angela Merkel 100% but this historic week we are going to see a confrontation between Italy and Germany. And I am not talking about a football confrontation but a confrontation between Angela Merkel and Mario Monti. Mario Monti spoke in Rome very angry words against France and Germany. He accused these two states of being the ones not to comply the rules of deficit some years ago. So the stakes are very high. Mario Monti has threatened to step down if Angela does not accept eurobonds. And Angela has said there won’t be eurobonds while she is in charge of Germany. Some weeks ago I also was in favour of eurobonds and I was also very angry with Angela Merkel.
But events in Spain have made me realise that Angela Merkel is quite right in not accepting eurobonds right now. If Angela Merkel accepts eurobonds that means that German tax payer is going to be responsible if Spain or other country with a bailout does not pay back. In some way Mario Monti wants Germany to pay the bill. And Angela rejects it. It is true that the eurozone can break up if Germany does not accept the eruobonds but why should Germany accept a eurozone where Germany is just the one to pay the bills? If the eurozone breaks up it would be terrible but Germany has less to lose than other economies of the eurozone.
In Spain we have been during decades with Catalonia paying the bill for the rest of Spain. The Catalan taxpayer pays more than he receives. In this way poorer parts of Spain receive a money they need. This is called solidarity. But people in Catalonia now are very fed up with all this because now with the crisis a lot of cuts have been applied to education and health in Catalonia.
So some people in Catalonia say that if we did not pay to much to Spain we would not need so many cuts in Catalonia. So I am afraid that Germany could end like Catalonia: to be the one to pay. Fortunately Germany is yet an independent state so that still can oppose to pay the bill. Angela Merkel was very very clear in Rome: Spain should be responsible of Spanish banks because she can control German banks but she cannot control Spanish banks! A country has to see how much money has and to act accordingly. I find outrageous to want Germany to pay the bill while at the same time in Spain, the Spanish government does not cut civil servants wages or increases the VAT. The other day I was speaking about the eurocrisis and I said that the problem was that to solve the eurocrisis we needed the Germans to pay. And then I was answered: “Well, let them pay!”. Well, I am not like that! Now if Spain wins EURO2012 each player gets about 300000 euros. How can Spain have a bailout and even asks Germans to accept eurobonds? If you go to any city in Germany, Spain, Italy, etc you always find people that are serious and people that like more the fiesta. Not all Germans are responsible with their money. And not all Spaniards waste the money in fiesta. I happen to be the one who thinks that each one must pay its own fiesta! If Angela Merkel accepted eurobonds we would see immediately protests in the streets of Germany. The Germans would see the rest of the eurozone as a burden! In Spain Catalonia has been paying the bill for decades and now in Catalonia there is such a feeling of frustration. When we look at Germany we can see two things: they have money and they work in a serious way. If we want the eurozone to succeed what we should do is to try to work too in a serious way. Unfortunately it seems as if we just wanted the money. And Angela Merkel says NOT and I agree with her.
If the world sees a eurozone where we all act more in a German way then the eurozone gains credibility. On the other hand if the world sees that Germany must accept to pay the fiesta of the peripheral countries then the eurozone loses credibility. The solution is quite easy as I say: see how much money each country has. And act accordingly. It would be crazy for Germany to pay a bill when only Germans and other few care about switching off the lights when not needed. Let me end by saying that accepting the refusal for eurobonds of Merkel I know this maybe the end of the eurozone we know but I do not want a eurozone where the ones responsible have to pay for the fiesta of others. I do not want that Europe. I do not want the eurozone to copy the Spanish model: one part pays for the general fiesta. I do not want Germany to become Catalonia. I want Catalonia to become Germany.
- Angela Merkel and Mario Monti clash over eurobonds (telegraph.co.uk)
- Italians fear a euro apocalypse as crisis spreads to Germany (express.co.uk)
- Italy: The Next Bailout Recipient? (theepochtimes.com)
- Now Cyprus asks for bailout – but Angela Merkel stands firm (independent.co.uk)
- Merkel Says No European Shared Liability As Long As She Lives (zerohedge.com)