German's Merkel punished for bailing out Germay

Apparently Americans aren't the only ones who don't like bailouts.

The pro-nuclear leader of the Christian Democrats, punished by voters yesterday for her reversal on aid for Greece, may lose their hold on power in North Rhine-Westphalia, Germany’s most populous state. The party’s worst result since World War II robs Merkel of a majority in the upper chamber in Berlin, limiting her ability to extend the lifespan of nuclear-power plants. . . .

Here is a great headline from the UK Mail newspaper: "'We are once again the schmucks of Europe!' German media's verdict as anger at Greek bailout swells."

German anger at the 750billion Euro Greek bailout is swelling as world markets slid after initial excitement at the bailout fizzled.
The headline on the front page of Germany's biggest newspaper, Bild, summed up the national mood, declaring: 'We are once again the schmucks of Europe!'
Meanwhile world stocks and the Euro dropped sharply today as the massive relief rally triggered by the plan to contain Europe's debt crisis fizzled out.
In Europe, the FTSE 100 index of leading British shares was down 107.88 points, or 2 per cent, at 5,279.54 while Germany's DAX fell 52.95 points, or 0.9 per cent, to 5,964.96. . . .
Today, Bild said: 'The EU and the Eurozone want to spend a massive 750billion Euros to save the European currency. Germany alone will have to fork out 123billion Euros for its bankrupt neighbours.
'There is now not enough money for the planned tax cuts here!
'Are we really the schmucks of Europe?
'Chancellor Angela Merkel said: 'We are protecting the money of people in Germany.' Really?'
Voters already delivered their verdict on Mrs Merkel's handling of the Greece crisis by punishing her in a regional election on Sunday which saw her party kicked out of power in North Rhine-Westphalia.
The loss means she loses a majority in the upper-house of parliament in Berlin and will not be able to deliver reforming legislation without the consent of squabbling rivals - an almost impossible task.
There are rumours that the right-wingers in her conservative CDU party are plotting a coup against her - rumours strengthened by the visceral distaste for her latest largesse in trying to prop up the common currency. . . .

Now Germany risk losing its AAA credit rating.

Germany is a AAA borrower in its own right; if you saddle it with the debt obligations of Greece, Portugal, Spain and others, its grading will have to be lower than the top level. It remains to be seen whether the rating companies, which are under almost daily regulatory threat from European governments for finally doing their job and downgrading weak borrowers, have the backbone to follow through on this logic. . . .

It may cost Germany $156 billion.

The New York Times reports that the Germany loan came about after pressure from Obama.

President Obama had just flown into Hampton, Va., Sunday morning to deliver a commencement address. But before he donned his silky academic robes, he was on the phone with Chancellor Angela Merkel of Germany, offering urgent advice — and some not so subtle prodding — that Europe needed to try something big.

Weeks of hesitant half-steps to address Greece’s debt problems had only worsened market worries about the euro, and were threatening the still-fragile economic recoveries in the United States and Asia. Now, Mr. Obama told Mrs. Merkel that the Europeans needed an overwhelming financial rescue to end speculation that the euro — and European unity — could crumble.

“He was trying to convey that he knew these were politically difficult steps that the leaders there had to take, that he had gone through them as well,” said one senior administration official familiar with the conversation. “And that, from his experience, trying to get out ahead as much as possible was the right way to go.” . . .

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