The German High Court sustained the ESM but laid out that the BAILOUT FUND had to stick to its agreed cap (EU190 BILLION) and that as suspected any further moves to enhance the bond buying program would have to be decided by the BUNDESTAG. It sustained the position of Chancellor Merkel for the time being, thus it makes President Draghi’s move to keep the period of financing to the short-term (LTRO FOREVER) a wise strategic move. The BUNDESTAG will be under pressure to adhere to the concept of “STRICT CONDITIONALITY” as Merkel and Schaeuble will have to be very attuned to the mood of the German citizenry as the Merkel government faces national elections in 2013.
Posts Tagged ‘Dutch elections’
Notes From Underground: Elections, Court Rulings, and Other Tales of Ordinary Madness
September 10, 2012The markets were suffering from fatigue as they struggled to digest the liquidity driven rally of global assets last week. This week will not provide respite as the financial world awaits the outcome of three potentially major market-moving events. The first mover will be the ruling by the German Constitutional Court (GCC) in Karlsruhe as the HIGH COURT will determine if the ESM established by the EU as a bond buying mechanism is in breach of Germany’s basic law, in that the ESM undermines the fabric of German politics by consigning the BAVARIAN BURGHERS to the credit responsibility of the EU profligate states. It seems that the COURT must deal with the concept of “TAXATION WITHOUT REPRESENTATION” as the transferring of German wealth to the European treasury needs to be done by the Bundestag and not by mere cabinet decision or by the complicity and complacency of the central bank.