Germany Not Interested in Bailing Out Europe

From Bloomberg:

Germany on Saturday rebuffed renewed calls that euro zone countries should issue joint euro-denominated bonds and have a joint finance minister, arguing that would only be possible if fiscal policy were collective already.

“As long as we don’t collectivise financial policy we also cannot have a uniform interest rate level. The different rate levels are the incentive to run a solid economy or the punishment if you are not running it properly,” Finance Minister Wolfgang Schaeuble, speaking at his ministry’s open day…

Really, it is the only way for Germany to act right now – the Eurobonds proposals, as they are, really amount to nothing more than bankrupt nation like Spain and Italy transferring a substantial part of their debt to German taxpayers.  Not only would this be political suicide for Germany’s ruling party, it would also be economically disastrous.  It wouldn’t actually stop the default, it would just delay it…and would ensure that when it came, it took Germany down with it.

Germany has tried very hard since World War Two – with great success – to put to rest the aggressive, wicked Germany of the two world wars.  They have gone way above and beyond the call of duty in being “good Europeans” and making things work.  But it is too much to ask that hard working, sensible Germans should have their economy killed off simply because Eurozone bureaucrats and profligate foreigners don’t want to pay the piper.

The bad news here – because Germany is unwilling to sign off on Eurobonds, there is not much the European Central Bank can do to sustain European banks and markets. Could be a rocky Monday in Europe…