Greece, the Euro, and the Battle of Jutlandby Ambrose Evans-Pritchard Recently by Ambrose Evans-Pritchard: Moody's Fears Social Unrest as AAA States Implement Austerity Plans
During the Battle of Jutland in 1916 or Skagerrakschlacht as it is known in Germany, the Imperial German Navy carried out a brilliantly executed “battle about turn” after straying into a death trap beneath the guns of the Royal Navy’s Grand Fleet. Admiral Scheer’s
High Fleet vanished into the mists within four minutes – his
retreat covered by a torpedo attack and the “death ride”
of four German battlecruisers that charged into Admiral Jellicoe’s
guns in an act of supreme sacrifice. The actions saved the Imperial
High Fleet. It has gone down in German history as the I was unaware of this until it was brought to my attention by Commerzbank this morning in a note by their currency chief in Frankfurt, Ulrich Leuchtmann. He drew the parallel with the astonishing volte-face by German leaders yesterday in suggesting that Greece should go to the IMF for a rescue after all. “A Gefechtskehrtwendung is a 180-degree turn that saves you. I think this may save Germany from a bail-out that they don’t like, that they can’t sell to German voters, and that creates legal problems under the no-bail-out clause of Article 125 of the EU Treaties.” “We think the IMF is the ideal solution anyway, and would actually be good for the euro. It would establish discipline and avoid moral hazard. It is much easier for the IMF to enforce austerity conditions,” he said. “The markets are still focused on the fact that we still don’t seem any closer to an EU rescue for Greece, so they are treating this IMF story as negative,” he said.
I agree entirely with Dr Leuchtmann. The EU top brass have of course been saying for weeks that it would be intolerable to let the camel’s nose of Washington’s IMF under the eurozone tent. Eurogroup chair Jean-Claude Juncker said it would shatter the credibility of monetary union. But is this all EU religious stuff: ideology and totemism. Mr Juncker, the Commission’s Jose Barroso, and their allies, have been trying to exploit the crisis to advance the EU Project, pushing the boat stealthily across the Rubicon towards fiscal federalism and a de facto debt union. They hoped that the Germans would not realize fully what was being done to them until too late. Chancellor Angela Merkel appears to have balked at this – understandably – seeing a standby facility for Greece as the beginning of a slippery slope that would leave German taxpayers on the hook for €3 trillion of Club Med debts. At least that is how I interpreted her comment yesterday that one should “perhaps call in the IMF”. The plot thickened when her Christian Democrat finance spokesman in the Bundestag, Michael Meister, said: “We have to think who has the instruments to push Greece to restore access to capital markets: nobody apart from the IMF has these instruments.” No doubt there will be further utterings today. This morning, Greek premier George Papandreou openly threatened to go to the IMF in an address to the European Parliament. These are the quotes that have just been relayed to me the floor by our very sound Brussels Correspondent Bruno Waterfield. “We are not asking for money from the Germans, Italians or French, what we are saying is that we need strong political support for reforms and to make sure that we do not have to pay more than necessary.” “We need to borrow at rates that are normal, similar to the rates other states in the EU and eurozone can use.” “In fact we are under an IMF programme. However we do not have the facilities that the IMF could give – money if necessary.” March 19, 2010 Copyright © 2010 The Telegraph
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