Notes From Underground

We know that this may be pollution to most people but as long as the air waves and op-ed pages are filled with nonsense, sometimes we just have to respond. David Marsh is somebody we have had great respect for as his book on the Bundesbank is one of the must reads for all those who really want to understand the global macro world. But when we vehemently disagree, we have to raise our “voice.” In today’s Financial Times, Marsh goes through the entire litany of reasons as to why Axel Weber would be a terrible choice to head the ECB. We don’t know what “kool aid” Marsh is drinking, or better, whose water he is carrying but his analysis is devoid of political reality.

As long as the Germans are going to be the guarantor of Europe via the transfer of wealth to support the sovereign bond market, they are going to DEMAND control of the lender or resort. Weber may be an autocratic type of leader and may be a classic German in the sense of budget austerity but that is the price that Europe will have to pay to secure German support going forward. Chancellor Merkel has suffered politically for failing to conform to German sensibilities when it comes to their money. If Merkel were to surrender control of the ECB to the profligate nature of the peripheries, she and the CDU will pay dearly.

 To the Europeans: The Germans can say, “it is your currency but it is our wealth.” The Germans are right to demand the presidency of the ECB for it is the EUROS of the Bavarian Burghers that have helped to restore some semblance of stability to the European credit markets. Mr.Marsh, it is right to say to Europe that membership has its price!

Tags: Axel Weber, David Marsh, ECB, EU, Euro, Financial Times, Germany, Merkel

This entry was posted on August 3, 2010 at 11:22 am and is filed under ECB, Germany. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.