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Germany’s New Currency: the “Merkels”

First I though it was a joke, but now slowly I believe it might be true: Germany is about to issue its own currency, the “Merkels”! However there is disagreement on the design of the new German “Merkel” coins and banknotes, as the Chancellor cannot decide on the banknotes colours combination and her own hairstyle on the coins. Therefore Germany hesitates in taking decisions about the euro-crisis. German Finance Minister Wolfgang Schaeuble said it clear in an interview to a German newspaper, that “Greece threatens the Euro”, but at the end … who cares? There must be urgently a plan to save the German and French banks from a Greek bond hair cut. So Wolfgang Schaeuble takes his time. Methodically slowly. One “Merkel” on the left, one “Merkel” on the right. The German Fin Min also rejects the idea of Euro-bonds. Does Germany have a plan on how to solve the euro-crisis? Schaeuble didn’t elaborate.

The debt crisis enveloping Greece threatens to engulf the whole of the euro region, Germany’s Finance Minister Wolfgang Schaeuble warned in an interview with Westdeutsche Allgemeine Zeitung.

He again stressed the importance of tackling the crisis in a convincing manner, but refused to elaborate on how this might be best achieved.

Turning to the threat of contagion, and Italyin particular, Schaeuble said: “Italy is in reasonable shape and cannot be compared to Greece. While Italy’s debt levels do not currently meet the Eurozone standard, they are not of undue concern and can quickly be returned to acceptable levels,” Herr Schaeuble told the paper.

He said that with unsustainable levels of debt seen in some parts of the region, “it is important we draw the right lessons.” The region needed to strengthen the coordination of fiscal policy, place more emphasis on sound financial markets, and subject governments to more oversight in order to achieve greater transparency, he said.

Schaeuble described Moody’s decision to downgrade Portugal as “incomprehensible,” adding that leaders needed to consider whether current rules on rating agencies are adequate. He said he supported the idea of a European based rating agency to act as a counterweight to the Anglo Saxon firms. He said he had asked the EU Commission to see whether the influence of the rating agencies could be limited.

Asked whether it might be more sensible for the Eurozone to issue its own bonds, Schaeuble said he thought that would be a mistake. “Such bonds would remove the incentive to ensure sound domestic finances by passing this responsibility onto the group as a whole,” he said.

He also said the political establishment must reduce the scope available for speculative manoeuvre within the market place.( source: imarketnews )

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One comment

  1. This comment made me smile; “He said he had asked the EU Commission to see whether the influence of the rating agencies could be limited.”. It’s typical of the EU’s attitude to the current cricis; if you don’t like the message then shoot the messenger!