The German chancellor faces calls to soften her resistance to euro-zone bonds that would increase investor appeal but also make euro nations liable for each others’ debts.
The connection between the two stories is clear, though the stories don’t make it: nor have any of the other stories I’ve read about the auction debacle. All the down-at-the-heels Euronephews are looking desperately at rich Uncle Fritz to bail them out. The more likely that becomes, the weaker the German fiscal position becomes.
And let’s face it. Fritz is pretty wealthy, but not nearly wealthy enough to pay for Europe’s past profligacy. The failed auction is a harbinger of things to come.
This will make the amputate-or-gangrene decision all the more pressing for Germany.
There’s an old blues song, Goin’ Down Slow. That’s not what’s going to happen in Europe: they’re going down, but the descent is accelerating.
The lyrics of the song, though, do resonate:
I did not say I was a millionaire…
But I said I have spent more money than a millionaire!
Cause if I had kept all my money that I’d already spent,
I would’ve been a millionaire a looong time ago…
The money’s already been spent, and there ain’t no mo’.
Hit it, Wolf: