11.10.2011 2

Will the U.S. and China Crush Germany into Submission?

By Bill Wilson — There has been no clearer articulation of the coming tyranny to be imposed on the once-sovereign nations of Europe — and what may be in store for the debt-addled U.S. should it fail to restore order to its fiscal house — than a recent piece from the UK Telegraph’s Ambrose Evans-Pritchard, “America and China must crush Germany into submission”.

In it the columnist advocates that the U.S. and China essentially force Germany to bail out financial institutions that bet poorly on Greek, Italian, and other troubled sovereign debts, writing, “it would not surprise me if U.S. President Barack Obama and China’s Hu Jintao start to intervene very soon, in unison and with massive diplomatic force.”

“One can imagine joint telephone calls to Chancellor Angela Merkel more or less ordering her country to face up to the implications of the monetary union that Germany itself created and ran (badly),” he writes.  He accused the Germans of “lacking in deep understanding of what it has got itself into.”

At issue is just who will be bailing out the banks that lent the money to Greece and others in the first place.  The consolidated debts of Portugal, Ireland, Italy, Greece, and Spain, the so-called PIIGS, total more than €3 trillion.  Evans-Pritchard wants that somebody to be the European Central Bank.

In the way, Germany has vetoed the use of the ECB to leverage the €440 billion European Financial Stability Facility (EFSF) upwards to perhaps €1.4 trillion — since such a decision would violate a recent German constitutional court ruling declaring that “the Bundestag, as the legislature, is also prohibited from establishing permanent mechanisms under the law of international agreements which result in an assumption of liability for other states’ voluntary decisions, especially if they have consequences whose impact is difficult to calculate.”

Moreover, such a move would violate Article 123 of the Lisbon Treaty that brought the Eurozone into being, which expressly prohibits the ECB from printing money to buy sovereign debts.

So, Germany couldn’t allow the ECB to monetize PIIGS’ debt, even if it wanted to, since it would tether the nation to liabilities vastly greater than what the duly-elected Bundestag had approved — and would violate the terms under which Germany had agreed to enter the Eurozone in the first place.

Evans-Pritchard’s advice for Germans? Suck it up.  He even acknowledges how undemocratic the practice would be, writing, “One can understand German worries about money printing — and especially the loss of fiscal sovereignty and democratic control — but matters have already moved on. It is too late for that.”

Too late to let people decide their own fates? Really? This is simply an overt argument for authoritarianism.  For Germany, it is a demand that the northern European state simply accept the shackles of being a debt slave, forever consigned to guarantee the debts of the entire Eurozone no matter how foolish member states are with their finances.

The Obama Administration should have no part in this affair.  It’s bad enough U.S. Treasury Secretary has already intervened in the crisis.  He vetoed a proposal by the International Monetary Fund that would have saved Ireland €30 billion by administering a haircut to unsecured bondholders.  It was described by then-Irish Finance Minister Brian Lenihan described as “Ireland’s salvation”.

It also was Geithner who originally proposed leveraging the EFSF to as much as €2 trillion wijth money apparently created out of thin air, the sovereignty and liberty of Europeans forced to pay for it be damned.

Presumably, it was just this same sort of coercion that has been brought internationally upon Greece where Prime Minister George Papandreou is being forced out of power for daring to suggest the Greeks have a referendum on whether to surrender their sovereignty to Brussels.

Or in Italy where Prime Minister Silvio Berlusconi was forced to accept Brussels-imposed austerity and IMF oversight of its budget.  He is also resigning his post.  All this after a G20 meeting with German and French leaders.  Before the meeting, Belusconi had insisted Italy would accept no bailout, and that he certainly would not be resigning. One imagines what he was told at the meeting.

Now, obviously Evans-Pritchard and the established elite are turning their sights on Germany.

Is this why America’s grandfathers and great-grandfathers fought and died to defend democracy in Europe from the scourge of fascism in the 1940’s, so the U.S. and international financial institutions could simply override democratic representation?

While many think of this as just a European problem, the U.S. should be careful.  The same coercive elements being brought to bear on Ireland, Greece, and now Italy can just as easily be turned on the U.S. — which at $14.9 trillion has the largest debt in the entire world.  How soon before we too are crushed into submission by our creditors?

Bill Wilson is the President of Americans for Limited Government. You can follow Bill on Twitter at @BillWilsonALG.

Copyright © 2008-2023 Americans for Limited Government