Bundesbank declares 'war' on Mario Draghi bond bail-out at Germany's top court

Germany’s Bundesbank has issued a devastating attack on the bond rescue policies of the European Central Bank, rendering the eurozone’s key crisis measure almost unworkable.

The hardline central bank - known as the temple of monetary orthodoxy - told Germany’s top court that the ECB’s pledge to shore up Italian and Spanish debt entails huge risks and violates fundamental principles. “It is not the duty of the ECB to rescue states in crisis,” it wrote in a 29-page document leaked to Handelsblatt.

williamdavies: Germany doesn't want to pay.  It's time to put the euro back in the box it came in.  And, incidentally, this unworkable farce of currency union with no fiscal union is the SNP's preferred option for an independent Scotland! Are they even awake?

undergroundman14: On a similar subject, why does the telegraph run a story about this: http://www.telegraph.co.uk/new… and not allow us to comment on it? Could it be due to the fact that most of the silant majority of the UK AGREE with UKIP, concerning the subjects of "racism" and kiddy rapists? I think so, and the Tories, and their telegraph lackies had better get use to it. P.S. I read that article about UKIP and thought, now i'm definitely voting for them

telegenic:  …and now your link does not work - so they still want no comment!!

elliemaesgrandad: Never mind the link, just post the title and we can look it up. The title will tell us more than a link reference, especially if the link fails or the story is pulled.

paulweighell: Awake? They are still hung-over from the night before. They have not thought it through and like all politicos they have put their silly ideas before the economics. Only Germany has a constitution that allows the Court to bang the heads of politicians for a sound economy, and the irony is that the constitution was written by the UK and US after WW2 but of course we did not apply it to ourselves. A golden opportunity missed.

crighton1953: The Rothschilds would not allow it.

paulweighell: My understanding is that the BB are correct. ECB purchase of national bonds using printed EUR is a constructive breach of Maastricht as it represents a simple transfer of wealth to those nations whose bonds are being bought and from the other EZ nations by inflating their currency, something Germany and its Constitutional Court is I believe legally bound to reject. It was I seem to remember a founding principle of the EZ that no nation would have to accept liability for another nation's debts and the ECB is getting far too close to forcing that on nations that have simply not agreed it. Many talk of democracy failing in Greece, Cyprus etc. but as no voter in the whole EZ has been asked if they wish their nation to pay for another's debts, democracy seems about to fail in the creditor nations too perhaps.

TheVoiceofReasonII:   Paul, the €U has never let a little thing like th erules get in the way of the project.

Michael C Feltham: Is the mighty Bundesbank - finally - waking up to reality? One can but hope…  

witichis: Methinks the Bundesbank never has been asleep. In my view, the Bundesbank has been on guard tirelessly, yet the creators of the Euro took away mail, sword and shield during the watch…

Gillian23: Germany fears a fresh upheaval in the bond market with Draghi wading in buying up peripheral bonds. Give it three years and Germany will have squandered all the fruits of its own relentless austerity and hard work FOR NO GOOD CAUSE WHATSOEVER because once there is no financial gain to the south in staying, they will simply quit and go back to their old funny money.  THERE IS NO FUTURE TO THIS PROJECT. There will be no federal Europe. The southerners have all made that quite clear. They are not even pretending to stick to the fiscal pact and even now the troika is trying to work out a way of justifying giving Greece even more money even though they have done bugger all and will never comply in any meaningful way with any of the conditions attached to any of it.

crighton1953: Indeed.  Do these people really think that a nation (southern states) can change centuries of culture and habit over night (or even in a generation). Mad - stark - raving - loonatics. Can the whole experiment now Germany - and save what hard-earned dosh you have left for yourselves.

MrBishi: "If the court sides with the Bundesbank in any way the whole house of cards could come crashing down.” Some good news then.

snapstep: don't think that a the failing of a number of banks will be so good. in fact it means that millions of account-holders will see their savings disappear.  draghi's measure to relieve the debt ridden countries of their bonds is seriously flawed since it just moves the debt into the hands of another party. like in cyprus, there must be a controlled and balanced haircut of all banks holding bonds, but no more severe than that the bank(s) will survive and the depositors won't be harmed. the parties that must accept some severe haircuts is the owners of the bank(s). sofar, whatever that has been propositioned by the  e-union has protected the banks and their owners but that is no longer feasible and there is a need to get to the core of the problem - viz. the banks and the owners. No other way to solve this problem.  

catherine_carr: The only thing that is keeping the banks afloat is the fact that they hold government debt and can use it to get funds to cover their liquidity shortage…  If you start writing off government debt then you will remove the liquidity… after that they will have to start calling in commercial loans and write off the bad and doubtful ones this will send them into bankruptcy immediately… Still want to write of the sovereign debt ???

crighton1953: Yes - short, sharp pain - for long-term gain. Witness Iceland. But, of course, Banksters and the MSM don't want to tell us about that.

MrVeryAngry: Wholesale debt for equity swaps?

MrBishi: Nonsense - shared debt a devaluation and print a few trillion euros - problem solved.

snapstep: more money and no added value - dream on like uk does and like the disunited states of america. both countries are slaves of the printing machines and germany, for once, isn't buying into the concept. reliving the weimar conundrum might have put them on a sound footing.

MrBishi: Ja wohl, mein Fuhrer

crighton1953: Unfortunately "pressure" will be brought to bear on the judges.

Partners