From Bloomberg:
Chancellor Angela Merkel’s party suffered its worst defeat since World War II in Germany’s richest state, losing control of Hamburg in the first of seven state elections this year that threaten to limit her scope to tackle Europe’s debt crisis.
The result in Hamburg, the city-state of Merkel’s birth, underscores the challenge she faces trying to balance public opposition to bailouts for debt-wracked states against pressure from investors and fellow euro countries to lead the way in stemming the debt contagion. She faces three more state ballots next month on either side of a March 24-25 European Union summit called to form a comprehensive plan for the crisis…
Keep in mind that the German economy is doing pretty well right now – Merkel, unlike our President, decided that spending a bazillion dollars on “stimulus” wasn’t the way to go…so, Germany is completely out of recession. Furthermore, in the overall good German economy, Hamburg is experiencing a boom – and the people of Hamburg really have no one but Merkel’s Christian Democrats to thank for this happy state of affairs…and yet the Christian Democrats were buried 21.6% to 48.5% by the leftist Social Democrat Party. Its the worst showing by the CDU in Hamburg since 1946.
Germans, I guess, are tired of having their hard work, careful savings and rational banking system being used as a piggy bank for their profligate neighbors in the European Union. And, in the end, why should Germans vote to tax themselves to bail out people who were just living fat without doing the work? This is a bit of a watershed for post-war Europe – since WWII, the Germans have been extremely eager to prove that the past is over and Germans are good Europeans. In large measure, they have succeeded at this…Germany is an integral part of the world community. But it has come at a price – and that price is proving too high financially for the German people.
The problem is that without free flowing cash from Germany, the whole scheme of bail outs in the European Union is entirely unworkable. Of course, it never was workable to begin with…but with the Germans all in with their stellar credit rating, it seemed like bail outs might work. If the Germans are to back away from more bankster bail outs then no one out there is going to believe that France can be a pillar of financial propriety. We’ll see how this plays out, but this could spell ultimate doom for the European Union as a financial entity.
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