The Social Democrats (SPD) and the Greens are pressing her for concessions. But they are both endorsing the basic notion that fixed debt limits should be enshrined in the German Constitution. It's basically outlawing Keynesian stimulus, preventing the implementation of Macroeconomics 101.
What is wrong with the SPD and the Greens that they're not just voting this down flat?
Euronews reports on European central banks preparing for rocky financial times over the next few days in Central banks brace for stormy weekend 06/15/2012:
This is the transcript:
It is a weekend of danger on the horizon for the international money markets. The reason is Greece, and the election there. It may see a government elected that wants to scrap the bailout, and then l point the pistol of default at the markets over its mammoth debt.Tags: austerity economics, eu, euro, european union, greece
Well, the central banks have guns of their own and they are preparing coordinated action should the eurozone lurch deeper into crisis on Monday.
Five of the world's biggest central banks, the ECB, Bank of England, Bank of Japan, Bank of Canada, and the US Federal Reserve will act together to stabilise the markets. If Greece should exit the euro, the EU could be facing a trillion euro bill.
"The European Central Bank has the crucial role of providing liquidity to sound bank counterparties in return for adequate collateral. This is what we have done throughout the crisis, faithful to our mandate of maintaining price stability over the medium term. And this is what we will continue to do. The Eurosystem will continue to supply liquidity to solvent banks where needed," said the ECB boss Mario Draghi.
The Institute of International Finance, which suggested the trillion-euro pricetag for a Greek exit from the euro now says that is an old figure and the cost would likely be higher, and in any case "unmanageable". It warns anyone contemplating a Greek exit should "think again".
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