Some Quotes from Der Spiegel

Some quotes from Der Spiegel that elucidate German sentiment on the whole Eurocrisis:

Two interesting quotes from an interview with Jens Weidman, President of the Bundesbank. Emphasis mine:


SPIEGEL: Are your alternatives truly realistic? As the example of Greece shows, a return to self-reliance and sanctions through interest rates is not an option. And stronger political integration requires a new contractual basis complete with lengthy parliamentary processes, and possibly even constitutional amendments and referendums.

Weidmann: I think both approaches are feasible in principle, which doesn't mean that they're easy. The second option does indeed require time-consuming changes to the European treaties and national constitutions. It's important to take these steps in the right order and not to introduce the common liability part now, which might be more convenient for some, just because political integration is expected to occur at some point in the future. But I also feel that it would be promising, contrary to many prophecies of doom, to pursue a path returning to the origins of the real framework. It has to be strengthened, however.

SPIEGEL: What exactly would happen if Greece were not to fulfill the conditions for the next tranche of aid payment? Would Greece no longer receive any money at all?

Weidmann: Part of the regulatory framework of the monetary union is to uphold agreements. This means that Greece must live up to its commitments, and that there will be no aid payments if these promises aren't kept. Otherwise we would be setting false incentives.

From another Spiegel article:
"'If something isn't done immediately then no option will be excluded,' the Süddeutsche Zeitung on Tuesday quoted an unnamed euro-zone source as saying. An anonymous European Commission source told the paper that 'absent a strong troika report, we will see a national bankruptcy at the end of the month.'" 

Take on Berlin Elections

After a drubbing in regional elections in Mecklenburg-Vorpommerania, Angela Merkel’s party lost out in Berlin regional elections over the weekend as well. Berlin, in addition to being Germany’s capital, is also one of Germany’s 16 states. The states send delegates to the upper house of German government (Bundesrat.) Larger states get more delegate votes for the upper house but not proportionally so that smaller states end up getting disproportionately many votes in the upper house. The upper house is important (for e.g. Eurocrisis concerns) insofar as any law that is supposed to pass needs to get approved by the upper house.

The previous elections in Mecklenburg-Vorpommerania cost Merkel’s coalition 3 of the 69 votes in the upper house. Whether the 3 delegates Berlin has will go against Merkel’s government or only “sort-of” against it will depend on coalition talks. The following are the seats in the Berlin state government:

SPD and CDU are the two main parties with CDU being Merkel’s party. In order to get majority (and get to send delegates to the upper house) you need absolute majority. Both of the big parties will need to form a coalition with one of the smaller parties to get there. The most likely is that SPD and the Green Party (Grüne) do that. The only viable solution for Merkel’s party would be to form a coalition with the SPD--a so-called grand coalition--seeing that all other parties are more leftist than the SPD. This would be the “sort of against” scenario. That’s unlikely to happen because even if the CDU made real concessions the SPD can always just go with the Greens b/c even though there could be frictions, they are a much more natural coalition partner than Merkel’s CDU.

Right now the CDU is part of 39 of the 61 seats. It’s hard to say how exactly the cookie would crumble for any particular issue since the CDU e.g. has 8 seats in coalition with SPD and 19 seats in coalition with the Liberals who, after this defeat (didn’t clear 5% hurdle, see below) may wish to reposition themselves and might not go strictly along coalition party lines in issues e.g. pertaining to Europe.

The other main development is how dissatisfied voters in regional elections are showing themselves to be with mainstream German politics. The Greens winning an extra 7 seats in Berlin was seen as big. So was that the Liberals (FDP), a somewhat more centrist conservative party, did not clear the 5% hurdle and therefore got no seats in state parliament.

Even bigger, however, is that a complete newcomer party, the “Pirate Party” got 9% of the votes and garnered 15 seats in the Berlin government. The main issues the pirates are hanging their hat on are: more direct democracy (i.e. less representational democracy), free public transportation, unconditional minimum salary (unconditional on having a job or not), legalization of minor drugs paired with education about drugs in schools, and increased teacher-student ratio with a target of 15-to-1. While they are unlikely to be able to influence national politics and therefore are irrelevant for Eurocrisis concerns it is nevertheless telling that they beat out a mainstay party such as the Liberals.

All this means that Merkel needs to think about her constituency. Federal elections, which will determine whether Merkel gets re-elected, aren’t until 2013 and in that sense Merkel can ignore growing dissatisfaction with German-European politics for quite a while longer before it becomes acute. But this also clearly shows that sooner or later these dissatisfactions will become an issue for the Chancellor.