HOT: Merkel's Coalition Calls for 'Orderly Defaults'

The end is here.

German Chancellor Angela Merkel’s coalition stepped up calls for allowing the “orderly” default of euro-region member states burdened with debt to avoid a repeat of the Greek fiscal crisis, reports BW.

Floor leaders of the three coalition parties also agreed in Berlin today to put a resolution to parliament alongside the bill on Greek aid calling for the European Union to revise rules for the euro to put pressure on countries that run deficits.
 
Meanwhile, in Spain, where the problems of Greece look like pocket change, Spanish Prime Minister Jose Luis Rodriguez Zapatero told reporters in Brussels that speculation of a bailout for Spain is “complete madness.”

Merkel: “A good European is not necessarily one who rushes to assist”

German Chancellor Angela Merkel does not seem to be in any hurry to provide bailout funds to Greece (Unless, of course, they are American funds via the IMF).

“A good European is one who abides by the European treaties and national law and thus sees to it that the euro zone’s stability isn’t harmed. That’s our guidance for all decisions today and tomorrow, and also for the future,”  Merkel said at today’s EU summit in Brussels.

However, according to Bloomberg, she did push for American taxpayers  the IMF to be part of any potential rescue.

Great Minds Think Alike: Wenzel-Mercer Edition

Me, November 27:

Is German Chancellor Angela Merkel an Austrian?

As in Austrian economics

Ilana Mercer, December 13:

Is Germany’s finance minister really an Austrian … economist, that is?

German Finance Minister Peer Steinbrück comments (via Mercer)

•No matter how much any government does, the recession we are in now is unavoidable.

•The speed at which proposals are put together under pressure that don’t even pass an economic test is breathtaking and depressing.

•The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking. When I ask about the origins of the crisis, economists I respect tell me it is the credit-financed growth of recent years and decades. Isn’t this the same mistake everyone is suddenly making again, under all the public pressure?

The United States Could Use an Angela Merkel and Swabian Housewives

Last week, I referenced a passage in a speech by German Chancellor Angela Merkel that makes her sound as though she is an Austrian when it comes to economics.

Leonard Liggio takes the story deeper and writes:

Last week at the Christian Democratic Union convention in Stuttgart, German Federal Republic Chancellor Angela Merkel said that German financial policy would be based on the habits of the traditional Swabian House-Wife: Not to spend money one did not have. As Merkel’s sound speech seemed to echo Wilhelm Roepke, one of the founders of the Mont Pelerin Society, it is worth noting that Ludwig von Mises, F. A. Hayek, Roepke and the others agreed on this as well as on most other issues.

Germany’s post-1945 Economic Miracle resulted from the thinking of the traditional Swabian House-Wife, as any one who visited West Germany then and noted the determination of the Germans to restore the honor of sound money can testify.

Since until recently, German descendants represented the largest ethnic group in America, one can find the inheritance of the Swabian thinking in America. One recalls that historically the majority German population of St. Louis were called the “Scrubby Dutch” because the house-wives cleaned the front walks and streets every morning. It would have been dishonorable not to do so. This was repeated in cities all over America by other European ethnic groups.

Liggio's full comment is worthwhile reading and is here.

Is German Chancellor Angela Merkel an Austrian?

As in Austrian economics. She sure sounds like it here:

Angela Merkel, the German chancellor, turned the tables on her international critics on Wednesday by accusing the US and other governments of making “cheap money” a central tool of their economic management, thus planting the seeds of a similar crisis in five years.

“Excessively cheap money in the US was a driver of today’s crisis,” she told the German parliament. “I am deeply concerned about whether we are now reinforcing this trend through measures being adopted in the US and elsewhere and whether we could find ourselves in five years facing the exact same crisis.”

Hmmm,a superior Lady Thatcher in the making.