Euro Schizophrenia in Germany

Submitted by testosteronepit on 11/21/2011 18:01 -0500

Wolf Richter www.testosteronepit.com

My German contacts want to keep the euro. They’ve gotten used to it. They like it in their wallets. Cross-border travel and commerce have become routine activities for which the euro is just so convenient. The euro has been strong despite the upheavals. But now that the European bailout fund, the EFSF, is descending into irrelevance, they fret about the euro’s future. They want it saved. Meanwhile, they're wondering whether to buy Norwegian kroner, Swiss francs, or Australian dollars—but end up buying US treasuries, ironically.

And they’re increasingly willing to pay a price as they grapple with a litany of plans to save the euro.

Plan A: An integrated and centralized Eurozone. To accomplish this, the 17 member states would have to redo their treaties and abdicate some of their sovereignty. José Manuel Barroso, president of the European Commission, the executive body of the EU, keeps proposing that plan. Angela Merkel has made comments in a similar direction. Instead of the toothless Stability Pact, a new treaty could allow Brussels to impose budgetary discipline on Eurozone members.

“The way into bondage,â€