Germany, which seems to labor under the delusion that democracy has not been replaced by plutocracy, has the temerity to protect its citizens from thievery by the banks. The Bundestag has now declared what Angela Merkel may and may not agree to to resolve the European banking crisis. Notably, the Bundestag has ruled out the only thing that would work: the German People’s money may not be transferred to the banks (or the countries that owe the banks money).
Europe’s lumbering efforts to end a widening sovereign-debt crisis became more cumbersome as the German parliament wielded new veto powers that allow lawmakers to block moves by Chancellor Angela Merkel makes that commit taxpayer money to new bailouts.
Passage of a resolution by Germany’s budget committee on Friday draws the lines within which Ms. Merkel must remain when she negotiates with European leaders at a summit on Sunday and adds a new dimension to European power politics.
The resolution requires Ms. Merkel to reject any deal on the European Financial Stability Facility, or EFSF, that would grant the euro-zone bailout fund a banking license and allow it to borrow money from the European Central Bank. Ms. Merkel must also reject any deal that would expand German guarantees pledged to the €440 billion ($609 billion) fund that go beyond current German pledges of €211 billion.
Good thing the United States and its banks have nothing to fear from the EuroBomb, which must explain why the Dow is up over 2% on these developments.