2011-08-11

They made us look like an occupied government

Jim Rickards has likened the latest European bailout plans to the Fourth Reich due to the level of control handed over to Germany. It's mainly financial control, but through this policy outlet they can wield a substantial amount of power. Italy's prime minister states it plainly: "They made us look like an occupied government."
Bail-outs chip away at France and Germany too
Criticism is mounting in Germany over the authoritarian creep of the Europe's crisis measures. Otmar Issing, the ECB's former chief economist and the country's most authoritative voice on the euro, said the EMU project was spinning out of control.

Far from evolving into an authentic fiscal union with "a European government controlled by a European Parliament, elected according to democratic principles", it is turning into a deformed creature where moral hazard is unchecked and the EU is intruding on sovereign matters.

By subverting the 'no bail-out' clause of the Maastricht Treaty the eurozone is "on a slippery road to a regime of fiscal indiscipline drowning hitherto solid countries in the morass of over-indebtedness."

Implicit transfers are taking place without parliamentary approval. "This type of political union would not survive. Its collapse would be brought by resistance from the people. In the past, cries of 'no taxation without representation' have brought war," he said.

Italy's leader Silvio Berlusconi lashed out at Europe yesterday after a leaked letter showed that the ECB had dictated the exact details of Rome's new austerity policies as a condition for ECB bond purchases.

"They made us look like an occupied government. They bought the bonds to save themselves, not Italy," he said, according to Il Messaggero.

"We're a long way from collective governance capable of scaring speculators. If it's our turn today, it can be Paris's turn tomorrow."

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