Is Germany Purposely 'Spooking' Markets?

After reading a recent Spiegel interview with German Finance Minister Wolfgang Schäuble, we at GermanyWatch are becoming increasingly convinced that Germany is playing a dangerous game with Euro markets.
The interview covered the subject of European financial regulation and integration. Here's a breakdown of Why we believe Germany is playing a game...

Schäuble:"..we have to bear in mind that it's extremely difficult to push through changes if people aren't convinced that they're really necessary."

SPIEGEL: In other words, if the euro fails, it will be for political, not economic, reasons?
Schäuble: The two are inextricably linked, but let me say it once again, very clearly: The euro is not going to fail.

Schäuble: ....There are certain support mechanisms that we are continuing to develop, with strict conditions: Member states that need our solidarity must reduce their deficits and reform their economies with measures that are at times very tough.
SPIEGEL: And what happens if they don't carry out sufficient reforms? Will aid be withheld, even if that carries the risk that the monetary union really will collapse?
Schäuble: There's no need to speculate about that. Still, we would be a strange government if we didn't prepare ourselves for all eventualities, however unlikely they may be.

Schäuble: ...Other parts of the world are watching closely to see if our freedom-based societies with their long-drawn-out democratic processes -- something which is at times(!) unavoidable -- will succeed in solving this problem. After all, democratic majorities tend to spend more money than they take in. That's something we can't afford anymore in many of the traditional industrialized countries, Germany included.

SPIEGEL: ...In historical terms, there have been only two solutions to these kinds of problems: either inflation, which devalues a country's debts more or less by stealth, although it does the same to citizens' assets …
Schäuble: … or, in the past, a war.....

Schäuble gives away a lot just in these short remarks. With all the fear-mongering that Germany may turn it's back on the Euro, he is making clear this is not going to happen on his watch. If you look at all the press articles about European 'bailouts' of the last two years, one theme runs through most...that Germany is clean and disciplined, and the PIIGS countries are wasteful slackers. This propaganda has been particularly obvious with articles on Greece.
Greece has been touted by the Germans as a lazy nation, who are effectively getting a free ride on German money. The German media propagandise that Greeks don't work enough, retire too early etc etc. Frankly disgusting German headlines have read "Sell The Acropolis You Lazy Greeks" and "Greece, You Really Are Our Most Expensive Friend!".

It does not take a genious to understand the effect on the German electorate. The electorate will now back savage control of other sovereign state's economies. Their propaganda would be less worrying if there were an ounce of truth in it. German media (in a complete misrepresentation of the facts) says the Greeks work less and retire early... yet the EU's own figures show that the average Greek works many more hours P/A than the average German.

And they overlook that Greece is largely in the trouble it is, because the one-size-fits-all interest rate of the Euro is essentially decided by Germany, for Germany. Financial houses (many German) were lending to Greece at the same rate as they would lend to Germany. Where was the German discipline there?

As much of what ends up news starts life as a press release, it would be interesting to know who is sending out all the press releases about Europe needing German leadership!

As Schäuble mentions, the population of Europe are not going to agree to German domination of Sovereign states until they have been "convinced" that the measures are necessary. This is where the lack of leadership in solving the Euro crisis comes into play.
Markets are panicking because everyone is being told we need German leadership in Europe but we don't have it. Merkel keeps going to meetings. Still no solid solution.
This game will continue to be played, and markets continue to take a hit, until European leaders BEG for Germany to take what she wants in return for German financial underwriting.

No matter how it looks on the surface, in the short term driving down the value of the Euro helps German trade. It is a win-win for them. They can spook the markets all they like. The poorer indebted (to Germany) nations are the ones who suffer from the market withdrawal. Back when Ireland was facing a bailout, it was blindingly obvious that Merkel would time her negative press talks to influence proceedings in her favour.

Another way the propaganda machine has been highly successful is that the indebted Euro nations need strict fiscal discipline (which dominatrix Germany is happy to supply), and reform their economies.
It is obviously sensible for a nation borrowing beyond it's means to reduce expenditure. Britain is a perfect example of that.
But we at GermanyWatch believe Germany has something else in mind. It is easy to forget in current conditions, that credit, when used wisely, will help less developed nations grow. If the Eurozone became truely combined economically, with Germany at the helm, then the credit account for Europe will be just one account. Not the individual nations. Do you think Germany is going to allow other nation's credit on her books?

Not a chance. Germany can shut down all competition from Europe, stunting the growth of other (former) nations, and actually extend her own credit line. The strict rules that Germany wants will only apply to others in order to dismantle their economies and gear them to support German industry. The only small credit lines allowed will be for the purchase of German products.

An alarming comment which just seems by-the-by at first glance, but should not be under-estimated, demonstrates Schäuble's view of democracy.
Not only does he remark on his frustration that "democracy is at times unavoidable" and "long and drawn out"... but he actually blames democracy (and democratic process) for creating the debt crisis! According to Schäuble, democracy is "something we cannot afford anymore".

Although GermanyWatch consider this an extremely worrying view, it is not the first time we have seen this.
In German foreign policy magazine Internationale Politik earlier this year, there has been talk in Berlin of the wish for "a bit of dictatorship" - specifically a "Provisional Dictatorship".

It seems many current German politicans, some covertly, some overtly, hanker after a dictatorship to really get things cracking in Europe.

If this surprises anyone, don't forget that true German democracy is but a fledgling in comparison with much of the rest of the world. It is barely 60 years old. And even then the UK and US had to force it on them!

Watch for more comments coming from Germany, implying that democracy is too inefficient to deal with the debt crisis.




For further info on German Press Subversion in the past, read our previous article - German Subversion Methods