New Dutch Prime Minister Rutte and Chancellor Merkel met today in Berlin and from this meeting it appears that both Germany and Holland are working together on preparing a common ‘permanent crisis-resolution mechanism’ – this means that Merkel has found yet another EU partner to make private investors shoulder more risk.
The measures, when agreed upon, are planned to come into force already in 2013 and it is contentious because Irish, Portuguese and Greek Government officials have all criticized the Merkel position calling it unhelpful as they themselves are forced to cut their debt levels.
The December summit of EU leaders will take up this issue of the mechanism for indebted euro-area countries. The measures, when agreed upon, are planned to come into force already in 2013 and it is contentious because Irish, Portuguese and Greek Government officials have all criticized the Merkel position calling it unhelpful as they themselves are forced to cut their debt levels.
The Spanish PM Zapatero has already said he opposed Merkel’s plan so it will not be an easy-sell, and hence any up-front support she can gather before the meeting will help.
The new Dutch government is an odd coalition with the slimmest of mandates and with all probability a very short ‘use-by-date’.
Led by the Liberals with Mark Rutte as new PM, and supported by the opportunist Maxime Verhagen, leader of the CDA party – and all of this backed-up and held together by the odious man behind the curtain, the reactionary xenophobe Wilders, whom even his coalition partners felt too embarrassed by to include in the government.
The Netherlands under its previous coalition government cooperated well with the Merkel government during the Greek economic turmoil and it seems now that the new bunch are equally close to Merkel on the debt mechanism.
The independent German state bank -the Bundesbank – supports Merkel’s plan, which was by no means a given, even though they are both German.
Germany, through its capable finance minister Schauble, has expressed its wish to have what are called ‘uniform collective action clauses’ written into present and future EU treaties.
This would enable ‘a change of payment conditions by majority decision of creditors in the case of any problems’ – meaning the guarantees would themselves be guaranteed …to the extent that such a safeguard would be possible.
Merkel is making much of her “battle” with the financial markets and investors and is coming out –or so she claims – on the side of the tax payer.
Whether this is just so much ‘populist’ CDU demagoguery on her part – an issue of the primacy of politics controlling economics as she calls it – or just solid and correct economics, only time will tell.
Karl Marx, a very smart economist as well as an astute polititian – he would certainly not have agreed maintaining that politics is an extension of economics and certainly not the other way around……… even a century after his death.
However this is a very complex matter and materialist dialectics would also maintain that things can and do turn into their opposites.
New Dutch Government Backs Merkel to create consensus on permanent EURO ‘crisis-resolution mechanism’ from OTA Berlin is licensed under a Creative Commons Attribution-ShareAlike 3.0 Germany License. If you use this article or parts of it, please refer to http://www.ota-berlin.de.