CRASH 2: “The eurozone is now a plague village” claims German banking source.
The Slog’s Bankfurt ‘Maulwurf’ insisted late yesterday afternoon EST that “The money is pulling out of Europe so fast now, the ECB will have to act within days, or we will be cut off like a mediaeval plague village. The eurozone has endemic Black Death, and nobody beyond our borders wants to catch it.”
Surfing across a variety of columns and new items this morning, it’s hard to not to accept his opinion. Polish Foreign Minister Radoslaw Sikorski made a dramatic appeal to Germany in Berlin yesterday, calling for more leadership in the euro zone crisis, and insisting “You know full well that nobody else can do it”. On Sunday the world’s greatest europhile Wolfgang Munchau talked of liquidity in the EU ‘grinding to a halt’, and yesterday evening Ambrose Evans-Pritchard at the Telegraph =gave some terrifying figures in the same vein.
But otherwise, in the first chance I’ve had in ten days to pump the Frankfurt mole about the developing ‘zero bank haircut’ plan, the man was not for pumping. Some of what he had to say, however, was quite intriguing:
“I think there has been some shift in opinion in Germany, that it is time for Berlin to show some leadership. But the German public are being kept in the dark about much of this. If they knew how much commitment Angela Merkel is drifting towards right now, the situation there would be very different. [Finance Minister] Schauble is always one step ahead of the media….nobody can keep up – not even the Chancellor at times.”
Where, I asked, did he stand now?
“Where I have since late 2010 – we should leave the eurozone and move to another arrangement. Had we done so earlier, the markets would not now be able to hound us as they do. It is utterly ridiculous that Germany is being treated as if she had a pressing debt problem, and it is all down to the Merkel Government’s indecision.”
But is he representative of German banking?
“I know [Jens] Weidmann [at the German Bundesbank] is fully behind my viewpoint that no more debt should be bought by either our Central Bank or the ECB. I know of many people in senior positions in private banking who remain wary of what Merkel will end up doing. If we knew what this will be, mind you, it would be helpful. Schauble remains an unknown, but he is one for the big idea. This has many professionals deeply concerned in Germany.”
And the ‘zero bank haircut’ proposition?
“I can’t comment about that. What I can tell you is that this [ESM/EFSF Summit] session over the next two days is yet another waste of time. What other ideas are under the table, well, it wouldn’t be constructive to say right now”.
The Slog’s Maulwurf is, at the end of the day, a banker. But first and foremost he is a eurosceptic who thinks Germany should cut her losses. My own view – firming up as time goes on – is that the Summitry is at least partly designed to muddy the waters in relation to the Big Idea originally hatched by France’s Sorbonniers.