Cyprus Seeks Bailout, Schaeuble Takes Obama to Task

Cyprus will become the fifth eurozone member to seek financial assistance. With its banks heavily exposed to Greece’s crisis Cypriots can expect to be among the hardest hit when Greece exits the eurozone. The announcement from the Cypriot government came soon after Fitch cut the Cypriot government’s rating to “junk”. The new government in Greece has done little to reassure the markets. Shares fell in Italy, Greece, and Spain as the upcoming EU summit and new rounds of bailouts fail to foster optimism.

Just as Cyprus seeks relief a 100 billion euro bailout plan was agreed for Spain, bringing the amount spent on bailouts and other rescue measures to close to 500 billion euros. Spanish Prime Minister, Mariano Rajoy, tried to convince skeptics that the currency was safe, saying:

We must dispel doubts over the eurozone … The single currency is, must be, irreversible,

The upcoming summit will be the last chance European leaders have to reassure the markets before shares slide further and faster. It is rumored that at the summit closer fiscal union, the introduction of a “banking supervisor”, banking union, and debt sharing will all be proposed as solutions to the situation in the eurozone.

As per usual in euro negotiations the Germans are acting as the fulcrum. German politicians are hesitant to take on some of the responsibilities of governments that spent irresponsibly. Germany’s Secretary of State, Steffen Kampeter, has said, “debt is a national responsibility”.

Another German to speak out against the perceived wisdom of monetary relief and the sharing of debt is finance minister Wolfgang Schaeuble. Not only has Schaeuuble come out against writing Greece checks, he has also taken Obama to task for putting pressure on European governments to act:

Mr. Obama should focus on reducing the American deficit … It's higher than in the eurozone. You have to understand that people are always ready to give others advice quickly.

Speaking against endless bailouts Schaeuble said:

We have to fight the causes … Anyone who believes that money alone or bailouts or any other solutions, or monetary policy at the ECB -- that will never resolve the problem. The causes have to be resolved.

While the Germans might be opposed to pooling debt and granting further bailouts they are in the minority. Because a closer fiscal union and pooled debt seem to be the only options being seriously proposed it is hard to predict how seriously the markets would react if the Germans reject the plans discussed later this week. 

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  • tarran||

    Why does this remind me of a two-year old throwing a tantrum?

    10 postal workers launch hunger strike

    WASHINGTON (CNNMoney) -- Ten current and former postal workers launched a more than 3-day hunger strike Monday to protest looming cuts and closures at the U.S. Postal Service.
    Drastic? Yes. But organizers say desperate times call for desperate measures.

    "Rallies and marches just aren't working anymore," said Tom Dodge, 58, a postal truck driver from the Baltimore area who has participated in several marches and rallies to save post offices. "It's time to take a stand on this. The post office is a part of our Constitution."
    The hunger strikers want the Postal Service to shelve its July plans to start closing or consolidating 48 mail processing plants. By the end of 2014, when the plan to shrink the postal network is completed, 229 plants will be consolidated or closed and 28,000 jobs will be gone.
    They also want Congress to eliminate a mandate that has been a major financial drag on the service -- annual $5.5 billion payments to prefund health care benefits for future retirees. The strikers say say eliminating the mandate would solve the Postal Service's financial problems.
  • Spoonman.||

    The strikers say say eliminating the mandate would solve the Postal Service's financial problems.

    ...in the short term, while exacerbating them hideously in the medium term.

  • ||

    Let them starve to death.

  • Brett L||

    If the workers at my local post office are any indication, it'll take awhile.

  • ||

    "The post office is a part of our Constitution."

    The Constitution authorizes it, dipshit -- it doesn't mandate it. You're not profitable. Die like any private enterprise would.

    Fucking parasites.

  • Broseph of Invention||

    Spin: "Post Office Motivates Postal Employees To Tighten Their Belts By Tightening Its Own".

  • John||

    How did Cyprus get into the EU?

  • Brett L||

    To piss off the Turks.

  • The Immaculate Trouser||

    The Brits and the Cold War played a role.

  • Pro Libertate||

    He's right. Obama should focus on U.S. debt reduction.

  • ||

    Obama's likelier to completely legalize and deregulate heroin use and sale than he is to do anything, ever, for US debt reduction.

  • Pro Libertate||

    Oh, yeah, he'd never actually do it. But he should.

  • John||

    The sad fact is doing that would probably win the war in Afghanistan and via tax revenues and reduced war costs do a lot to reduce the debt.

  • R C Dean||

    We must dispel doubts over the eurozone … The single currency is, must be, irreversible,

    The single currency is quite reversible. The Germans have already laid in the laws, etc. they will need to get out, in fact.

    Whether it "must be" irreversible is more a matter of opinion, n'est ce pas?

  • Tman||

    I don't know if anyone saw it, but the WSJ had a brutal front page picture headline this weekend.

    It showed this picture of Merkel - http://www.newyorker.com/onlin.....cheers.jpg - celebrating Germany's win over Greece in the soccer tournament, and the headline on top stated the following-

    "Germany Celebrates Greek Exit".

    Oof. Well done WSJ, well done.

  • R C Dean||

    I larfed.

  • John||

    The Germans for all of their flaws, are a responsible and frugal people. And their reward is having a bunch of EU assholes try to steal their savings to support a bunch of lazy Greeks and Spaniards. At this point, I wouldn't blame them for starting to march a few places.

  • Voros McCracken||

    You know who else wanted the Germans to march a few places?

  • Restoras||

    Joe Kennedy?

  • Almanian...still||

    John Phillip Sousa?

  • Broseph of Invention||

    The Olympic Commissioner? The Oktoberfest Organizers? The Euro Cup event planners and ticket sellers? Not sure what you're getting at.

  • Mr. FIFY||

    Chef? Mr. Mackey? The 1979 Denver Broncos?

  • Almanian...still||

    Responsible - YEAH, RESPONSIBLE FOR THE DEATHS OF SIX MILLION JEWS.

    Although they do pay their gas bill, so....

    /making fun of completely horrific things

  • John||

    They had a lot of help from the French, Poles, Italians, Greeks and pretty much everyone besides the Dutch in killing those Jews.

  • Almanian...still||

    The Vichy French always struck me as particularly loathesome and execrable, for whatever reason.

    People do the worst things to each other...

  • John||

    They were every bit as bad as you think The "French Resistance" was a lie. They gladly rounded up their Jews and sent them off to the camps.

  • ||

    I imagine it pisses the Poles off tremendously that the fake French Resistance gets so much more credit than the extremely real Polish Resistance.

  • Pro Libertate||

    They do get fucked over a lot. I think they need a better PR firm. Like the one they used back in the Solidarity and Polish Pope days.

  • Mickey Rat||

    I think that's well down the list of things Poles are pissed off about the resolution of WWII.

  • Almanian...still||

    Also,

    Productive Americans for all of their flaws, are a responsible and frugal people. And their reward is having a bunch of assholes in Washington try to steal their savings to support a bunch of lazy and non-productive Americans. At this point, I wouldn't blame them for starting to march a few places.

  • John||

    We are not so frugal anymore.

  • Almanian...still||

    What's this "we" stuff, kemosabe?

  • John||

    Speaking of. Get this review of a book by a British Libertarian on New Labor Britain. Ring a bit familiar

    In Blair’s Downing Street… Cabinet ministers had no pretense to status or independence. They knew they were just cogs in the New Labor Project. Party strategists would make the important decisions, not them… Downing Street strategists [also] have no time for the traditional role of Parliament — scrutinizing legislation… and holding the Executive to account. So Parliament… [was] sidelined along with the Cabinet… Blair’s team [also] … seized control of the whole civil service structure…

    Nursing homes don’t allow you to bring in home-made cakes for your granny’s friends because that breaches the food hygiene rules… Restaurants have to apply for an entertainment license before they can have a violinist serenading the tables on Valentine’s Day.’ [128-129]… Durham education chiefs banned sack races from a school sports day in case children fell and hurt themselves.

    Symptomatic of the political rot to which New Labor rule subjected Britain were the regular leaks by ministers and press officers, and the spin routinely put upon official government reports and press briefings. Above all, there has been its unrelenting cynical news management

    http://libertylawsite.org/book.....n-a-state/

  • Almanian...still||

    wow

  • Paul.||

    At this point, I wouldn't blame them for starting to march a few places.

    Why would Germany have to march anywhere? It's the Greeks and Spaniards that keep demanding they march into their country, bearing duffle bags full of cash.

    If anything, Germany should simply say, "No" and go back to minding its own business.

  • John||

    Or build a few tanks and take back of of the money the EU stole.

  • ||

    Europe has been stabbing them in the back all this time.

  • Paul.||

    Anyone who looked at the EU way back in the 90s and didn't see this coming deserves what they got.

    However, at this point, Germany should simply say, "Fool me once..." and consider what they lost to be a lesson well learned.

    If they enter any debt sharing agreement, then they're solidly in "Fool me twice" territory and I have no sympathy for them whatsoever.

  • John||

    It is not the Germans it is their leaders. And the German public ought to hang a few people over this.

  • Almanian...still||

    How about we criticize Cyprus' collective spelling and grammar skills instead?

    Oh, wait - we can do both.

    Have at it!

  • Ska||

    The olive doesn't fall far from the tree.

  • Restoras||

    it is hard to predict how seriously the markets would react if the Germans reject the plans

    I don't think it is all that hard to predict how the markets will react

  • Almanian...still||

    I know it's Cypress HILL and it's spelled different, but I've been channeling "Hand on the Pump" since I saw the headline.

    Could be worse - I like that song. "It's a Small World" would be an issue...

    "Cypress Hill Will Bust a Cap In The Ass of Other EU Countries If They Don't Step Up"

  • Broseph of Invention||

    So you wanna be Euro member, in the EU,
    And take shit from countries who don't know what you do.
    I wish it was all tourists and holidays but the price of the Euro is high,
    And some can't pay the way.

  • EDG reppin' LBC||

    Nicely done, Broseph.

  • albo||

    In exchange for bailing out all these southern European countries with nice beaches, Germans should demand permanent easements for all of their vacationing citizens to be as loud and obnoxious in their tiny little Speedos as they want.

    "Waiter, anosser Mai Tai over her, mach schnell!"

  • Pro Libertate||

    Perhaps that all the conquering Germans ever really wanted. Some nice, warm beaches.

  • Paul.||

    You know who else used to wait on Germans in cafes?

  • Pro Libertate||

    "Guten tag. Mein namen is Adolf, und I vill be taken ze order today, mein herr."

  • ||

    "How long are you down here for, Mr. Hilter? Just the fortnight?"

  • Pro Libertate||

    "Don't order der weinerschnitzel--the chef is Jude."

  • Paul.||

    I was picturing a french waiter in in 1942 asking if the nice officer would like to see la spécialité de la maison.

  • Paul.||

    and debt sharing will all be proposed as solutions to the situation in the eurozone.

    Isn't "debt sharing" what happens when you marry an art history major in a community property state?

  • ||

    Looks like the Franco-German plan is going swimmingly. The PIIGS turned their monetary policy over to France Germany through the Euro, soon they will have to turn their fiscal policy over, too. An Empire by Debt instead of by arms. Brilliant.

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