Everyone understands that Jean-Claude Junker, the head of euro-zone finance ministers is a liar. He has openly admitted such. To what extent are other politicians lying?
Der Spiegel explains Politicians ‘Are Lying Through Their Teeth’ on Greek Aid
German commentators on Friday take a look at the latest efforts to save Greece, with a focus on the ECB’s opposition to debt restructuring.
The center-right Frankfurter Allgemeine Zeitung writes:
“This time around, Schäuble seems to have at least won the support of Chancellor Angela Merkel for his idea of a ‘soft’ debt restructuring involving private creditors. But the whole thing reeks of internal political maneuvering designed to keep the growing number of skeptics in the coalition ranks in line. It’s hardly surprising that the financial markets remain unsure and have no confidence in the rescue efforts. Instead of being the motor of European integration, the single currency now looks more like a bomb ticking away within the EU.”
“Amid the sea of uncertainty, only one thing is certain: The EU is at a crossroads. It has become clear that the economic and monetary union does not have the tools at its disposal to act quickly and decisively in crisis situations. The crisis also shows just how far the financial and economic interdependence of the EU’s member states has developed in recent decades. Countries are happy to receive the advantages of this integration, such as free movement of labor, development funds from the Brussels pot or low interest rates on the capital markets, even for highly indebted countries. But they also like to circumvent those things that they should accept in return, such as fiscal discipline and tougher competition. Only now has it become clear to everyone that you cannot simply pull threads out of the fabric of European integration without risking tearing the entire thing apart.”
The Financial Times Deutschland writes:
“When it comes to the construction of the next bailout for Greece, all the stakeholders are lying through their teeth to such a degree that one hardly knows who one should point the finger at first. The thing that unites them is that none of them want a solution that will really involve private creditors, irrespective of whether you want to call that a default, rollover or debt restructuring.”
“The decision in favor of another rescue package is based more on political will than on a sober analysis of the data. To their shame, the troika did not even try to find out whether the conditions that they had previously set for help have been fulfilled. In theory, an analysis should provide information about whether Greece has any chance of getting back on its feet in the medium term with the help of loans. The fact that the troika has so far avoided carrying out that analysis can only mean one thing: The rescuers do not want to know the answer, because they fear the consequences of an inconvenient outcome.”
The center-left Süddeutsche Zeitung writes:
“Under Jean-Claude Trichet, the ECB purchased Greek sovereign bonds on a large scale, which are now rapidly losing value. It would have been better off leaving this rescue effort to national governments, because it has now made the ECB into a stakeholder with its own interests, just like the Greek government or Deutsche Bank.”
“Faced with the question of whether a debt restructuring for Greece will help the country get out of its crisis, or if it will unleash a firestorm across Europe, ordinary people need the help of an independent opinion, because governments and commercial banks are pursuing their own interests. But the ECB is no longer independent. As one of Athens’ major creditors, a haircut on Greek debt would cost it a lot of money. As a result, its warning about a debt restructuring are not credible.”
The left-leaning Die Tageszeitung writes:
At the end of the day, the ECB would not exist without the euro, so it can be assumed that the central bank will do everything possible to save the single currency. As the Austrian economist Stephan Schulmeister told this newspaper back in January, institutions’ self-preservation instincts should not be underestimated.”
Lies and Questions About Possible Lies Abound
Jean-Claude Junker openly admitted “When it becomes serious, you have to lie.” That admission came shortly after he denied there was meeting that he was actually attending.
Jean-Claude Trichet made a huge mistake buying Greek and Irish debt. To what extent is Trichet attempting to save his reputation to the detriment of a real solution?
Neither the Fed nor the ECB has shown any humility over clearly visible and grievous mistakes.
Is there any reason to believe any EU official? Is there any reason to believe the Fed? Geithner? Obama?
I await a global leader who steps up to the microphone and says “Things look bad, but they are even worse than they look. Sacrifices must be made and everyone has to share including the banks, the public unions, the military, and all special interest groups. …”
Instead we have lie, after lie, after lie by politicians whose only concern is getting reelected. We also have lie, after lie, after lie by central bankers whose only concern is bailing out the banks at taxpayer expense while absolving themselves of blame for the mess we are in.
Mike “Mish” Shedlock
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