Germany to the rescue?

Conor

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From Bloomberg:

Feb. 17 (Bloomberg) -- German Finance Minister Peer Steinbrueck said euro-region countries may be forced to bail out other members of the 16-nation bloc that face problems refinancing their debt.

“Some countries are slowly getting into difficulties with their payments,” Steinbrueck said late yesterday in a speech in Dusseldorf. “The euro-region treaties don’t foresee any help for insolvent countries, but in reality the other states would have to rescue those running into difficulty.”

While declining to identify countries facing problems, the German finance chief said Ireland, which has a widening budget deficit, is in a “very difficult situation.” Ireland’s debt- rating outlook was cut by Moody’s Investors Service Jan. 30.
Bloomberg.com: Worldwide

This is the closest I've heard to anything approaching support from our Euro-friends, and very welcome it is too, imo. What do other piesters think?

<Mod> This thread has been merged with "Germany considering bailing out Ireland?" and "Germany to bailout small eurozone countries?" </Mod>
 
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the klingon

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You had me at Hallo.
We will need a shovel of cash pretty soon, but expect strings attached, if they ask for some reforms that would be fantastic news towards building a sustainable economy. Lets face it, we are unable or unwilling to reform ourselves.

It could help us avoid a further downgrade of credit status too, but so could merely mentioning the fact that "they were there for us" could add confidence.
 

forest

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this doesnt make sense why I have no objection to the germans giving us money there are certain provisions in the masricht treaty stopping or preventing certain states (germany) from having to bail out other states (Italy, Greece and now it seems ireland)

Also germany is to have an election soon i think. This would not be too popular with the voters
 

st333ve

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Wouldnt this just mean that the largest EU countries can bail out small countries while making long term profits on the lending and appearing generous?
It sounds like Germany is trying to fill the gap the banks have left.

Could this be more about creating a stainable future for wealthier EU states, the money needed to keep Ireland afloat might seem vast but to somewhere like Germany it is an affordable good investment.
 

Al.

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Germany considering bailing out Ireland?

This has the makings of a Faustian pact if ever there was one. Ireland's faced with possible fines from the undemocratic Commission over the budget deficit rise above 3 per cent and all. (Prior to this, Germany was dead against bailing out anyone but themselves. What will Ireland owe them in exchange?)

EUobserver
Germany open to bail-out of a eurozone country

HONOR MAHONY
18.02.2009 @ 09:23 CET


Germany has, for the first time, publicly raised the idea of bailing out nations in the eurozone that are struggling in the face of the economic crisis, mentioning Ireland in particular.

"We have a number of countries in the eurozone that are clearly getting into trouble on their payments," said German finance minister Peer Steinbrück, according to Reuters.

"Ireland is in a very difficult situation," he noted.

"The euro-region treaties do not foresee any help for insolvent states, but in reality the others would have to rescue those running into difficulty."

The comments, made at a Social Democrat conference on Monday, appear to represent a shift in Berlin's thinking, with Germany previously indicating that countries with ailing economies would have to solve their problems themselves.

Ireland, once famed for it booming economy and nicknamed the Celtic Tiger, has been particularly hit by the financial crisis which has seen its property market implode.

Its top credit rating is at risk, rating agency Moody has warned and it suffers from a yawning budget deficit — this year predicted to rise to 11 percent of GDP, smashing through the rules of the eurozone, which limit budget deficits to three percent of growth domestic product.

Credit default swaps (CDS) on Irish Government bonds rose to 386 on Tuesday, prompting the Ireland's Department of Finance to release a statement that conclusions about the "soundness of Ireland's public finances" should not be drawn on the basis of credit default swaps.

A rise in the rates is a sign that market is nervous about credit quality. Greece, Spain, and Austria have also seen strong hikes in default costs...
 

JollyRedGiant

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The answer to the question is NO - but if they want the Euro to survive they might have to do a little tweeking - like telling Cowen to forget about cutting €16b to get to the 3% growth and stability target and giving us a 'guarantee' for our borrowings.
 

jpc

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The answer to the question is NO - but if they want the Euro to survive they might have to do a little tweeking - like telling Cowen to forget about cutting €16b to get to the 3% growth and stability target and giving us a 'guarantee' for our borrowings.
One way or the other this country will be living within its budget within the next few years.
The same will happen to any other nation outside its budget limits.
Either that or the Euro won't exist.
Cause the Germans ain't gonna take one for the team.
They did it for East German reunification.
They won't do it again soon.
 

Utopian Hermit Monk

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Dev knew back then that a friendly gesture might prove useful at some stage:



 

Oldira1

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We should say 'no thanks' to any help from Germany. Remember the help given to Austria in 1938? Poland 1939?
 

drbob1972

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Germany to bailout small eurozone countries?

apologies if this has already been covered elsewhere, but noted on the beeb that German Finance Minister has said:-

"Separately, Germany's finance minister said Germany might consider bailing out smaller European nations. Germany's Finance Minister Peer Steinbrueck described the suggestion that the eurozone could fall apart as "totally absurd" and promised that if other member states got into trouble, "we will show ourselves to be capable of acting""

full article here -

BBC NEWS | Business | IMF expects more requests for aid

whilst i have believed and stated that i would not expect the ECB to allow the IMF take over an eurozone economy as it would be very damaging for both the euro and for the confidence / cohesion of the eurozone, i think its very interesting to see Germany's FM make a statement like this, obliviously he didn't mention any particular countries but we must be pretty high up on the list of contenders (ie. the top of the list)....

if such a thing were to come to pass one would have to wonder what the terms and conditions would be, could we effectively end up under German Finance Ministry management ? could that be worse than what we have at present ?
 

Digout

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I dont think they would be happy to put any money into Ireland unless there is serious political reform.

Who in their right mind would pour money into a corrupt state?
 

drbob1972

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I dont think they would be happy to put any money into Ireland unless there is serious political reform.

Who in their right mind would pour money into a corrupt state?
thus the question, what would their T's & C's be ?
 

drbob1972

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There is another thread somewhere, I think, but I would wonder if we can't sell drugs instead or pimp out our wives and daughters, anything rather than be beholden to that country for anything....
whats wrong with "that country" ? also its the only economy in the eurozone that could actually do something, can you see France or Italy having the resources or political will to do so ?
 

Oblivion

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Well, we're already using German Deutschmarks ( I mean, "Euros" ) and half our laws are now made in Brussels - so why not throw in the towel and go the whole hog?

In for a penny, in for a... Euro.
 
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whats wrong with "that country" ? also its the only economy in the eurozone that could actually do something, can you see France or Italy having the resources or political will to do so ?
Call it a long memory. The idea of half of Europe being in Germany's debt, particularly if at all avoidable, sticks in the craw slightly. This is just my little emotional prejudice...
 

drbob1972

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Call it a long memory. The idea of half of Europe being in Germany's debt, particularly if at all avoidable, sticks in the craw slightly. This is just my little emotional prejudice...
fair enough, as long as it was not a logical and rational opinion....
we are all entitled to our emotive reactions and prejudice's
 


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