Bloomberg reports that senior German coalition lawmaker Michael Meister says that the German government will oppose any attempt to make the European Central Bank accept a writedown on its Greek bond holdings.
He said:
“I can’t imagine that European politicians would allow third parties to make such an indecent claim on our central bank. That contradicts our philosophy.”
Germany is the lead player in the Greek bailout talks which require private sector banks to take a 'haircut' of over 50% of their loans to bankrupt Greece.
What they are basically saying is that it is 'decent' for British savers to pay for Greece's problems but 'indecent' for German tax payers to do the same.
Private investors hold about 60 percent of Greece’s 350 billion euros ($454 billion) of debt. Germany wants them to accept losses of nearly 70% on those loans and for the ECB to keep 100% of theirs. British banks, British savers and British pension schemes would be hit by the losses.
The UK is not part of the Euro because we said that a single currency requires a single government and huge transfers of wealth from the wealthy parts of the currency zone to the poorer parts.
The German politicians did not listen to us and went ahead and created the Euro anyway. Now they say that it is 'indecent' for them to pay for their own failure and expect us to pay for them.
I don't know what the German word for 'decent' is, but I'm sure it has a different meaning to the English equivalent.
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