– Is German Anger Finally Coming To A Boil? Even Local CEOs Say Time To Exit Euro May Have Arrived (ZeroHedge, Jan. 15, 2012):
It would appear that the German public (and political class to some extent) are beginning to see the European project in the same manner as we described back in July. As the increasing burden of saving the eurozone from its own excess falls on the shoulders of every Tobias, Dirk, and Heike taxpayer in Germany, even industry leaders, such as Wolfgang Rietzle, the CEO of Linde, this weekend according to Reuters, are suggesting a line in the sand has to be drawn and that “if we do not succeed in disciplining countries then Germany needs to exit.” This has been very much a view we have held for months now that instead of the periphery limping away one-by-one, the very core of the foundation will simply decide enough is enough or as Reitzle notes (among many other critically insightful comments) “the willingness of countries to reform themselves is abating if, in the end, the European Central Bank steps in.” This morning Germany’s FinMin Schaeuble added to the potential separation chatter with his comments, via Bloomberg:
- *SCHAUEBLE SAYS ECB AS LENDER OF LAST RESORT WOULDN’T CALM MKTS
- *SCHAEUBLE SAYS JOINT EURO REGION BOND SALES NOT A SOLUTION
Hardly reassuring given the dreams of every GGB owner and BTP-exposed insurance company are banking on the ECB cranking the presses to ‘secure’ nominal returns in the real world. The EURUSD has opened down 40 pips or so on a slow Sunday afternoon as we remind hopeful investors (and the German public) of our comments from last July (which seem even more prescient now with the AAA downgrades and increasing reliance on EFSF and ESM mechanisms placing more burden explicitly on German taxpayers and “in doing so may have jeopardized anywhere between 32% and 56% of its entire annual economic output“.
Germany should consider leaving the euro if efforts to impose fiscal discipline upon indebted euro zone countries fail, the head of industrial gases firm Linde (LING.DE) told German weekly paper Der Spiegel.
“I fear the willingness of crisis countries to reform themselves is abating if, in the end, the European Central Bank steps in,” Linde’s chief executive Wolfgang Reitzle was quoted as saying.
“If we do not succeed in disciplining crisis countries, Germany needs to exit,” said Reitzle who was previously a board member at carmaker BMW (BMWG.DE) and head of Jaguar and Land Rover.