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Big business makes plea to 'save the euro'

The Local · 21 Jun 2011, 14:52

Published: 21 Jun 2011 14:52 GMT+02:00

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Bosses from 50 of Germany and France’s top companies, among them

Siemens, BMW, Deutsche Bank, ThyssenKrupp, EON and Daimler, joined the plea to stand firm with the embattled euro in advertisements carried in major newspapers on Tuesday under the headline, “The euro is necessary.”

The companies, representing annual sales of €1.5 trillion and five million workers worldwide, wrote that they were “concerned about the future of the euro and the common European economic and currency union” as the beleaguered eurozone member Greece stands on the precipice of bankruptcy.

Facing a rising tab from bailout packages for Greece, Ireland and Portugal, and with a second bailout for Greece in the making, many German taxpayers in particular are angry with the direction the currency union has since the global financial crisis in 2008.

But the coalition of business leaders, said the euro had made Europe unquestionably stronger and the consequences of allowing it to collapse were unimaginable.

“The euro symbolises the Europe of today. A collapse of the euro would be fatal step backward for Europe,” they wrote. “We have to convince our fellow citizens of this.”

They added that since the euro was introduced in 1999, nearly nine million jobs had been created in the eurozone and the euro had risen to become the second most important global currency after the US dollar, strengthening Europe’s economy and its businesses.

“Suggestions such as the exit of peripheral members or the breakup of the community into a northern and southern union are the wrong approach. They would have consequences that are barely imaginable today. Such populist solutions are not appropriate for the seriousness of the situation,” they wrote.

The campaign came as Greece’s parliament prepared for a Tuesday night vote of confidence in Prime Minister George Papandreou’s newly reshuffled cabinet – seen as crucial step toward further belt-tightening to get the nation’s public finances under control.

Eurozone finance ministers on Sunday night warned Greece would not get the next €12 billion instalment of its existing bailout package unless it proved it was moving ahead on austerity measures.

Countries such as Greece who were beset by debt crises had to be helped in the short term, the French and German industry leaders wrote on Tuesday, “to regain their financial independence and create for the people there a better prospect for the future.”

“The return to stable financial relations will cost many billions of euros, but the European Union and our common currency are always worth this effort.”

Switching to tougher language, the company bosses also stressed that action was needed to prevent future crises, including swifter sanctions for countries that broke the “stability and growth pact.” The 1997 pact obliges the 17 eurozone members to keep their budget deficits and national debts within certain limits – precisely to avoid the kind of ballooning debt that is now weighing upon Greece.

“In order to prevent in future a crisis such as the one we’re now going through, we have to strengthen the originally agreed stability pact and guarantee adherence to it,” they wrote.

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“Indeed, sanctions must take effect as early and as effectively as possible. Furthermore, member states must co-ordinate their economic and fiscal policies more closely than before and speak publicly with one voice.”

The latter is a reference to concerns that conflicting messages from big players including Germany, France and the European Central Bank have spooked markets, worsening Greece’s problems.

“The common currency needs constant solid state finances, clear regulations governing adherence to the stability pact, transparent structures and fair standards for competition. Only this way will the euro emerge stronger from the debt crisis. There is no serious alternative to the common currency.”

The Local/djw

The Local (news@thelocal.de)

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Your comments about this article

15:49 June 21, 2011 by JohandeWittUK
I fully agree and commend the German industry for taking the so desired leadership..

The Greek parliament is currently facing a tough call with respect to future measures to reaarange their financial household book. And at present we are seeing the economists do the calculating, the politicians do the talking/negotiating and the banks may mildly be supportive. Yet all the talk and public debate seems to be in terms of black and white, of division, rather than in terms of connection.

At pressing times like these, it may be time for the citizens themselves to speak out and connect to Greece and its people. The euro has a very positive cost-benefit ratio as it shielded Europe from uncanny complicated situation when the financial crisis hit in 2007. Without it we would have had highly fragmented local financial disasters all over Europe. Politicians are forgetting this too quickly and choosing for populistic lines of reasoning to satisfy what, in their view, is the peoples wish/opinion.

On both a political and human level, there is no other way than supporting the Greek. But we shouldn't let only the politicians and bankers do the work. It is now time for European labour unions, companies, families, sports clubs, stamp collectors and what have you, to reach out to the Greek counterparts that they have been in touch with over the last years.

It is a heartening sign that in particular the German industry stands out and leads the way in terms of this moral leadership...
16:09 June 21, 2011 by christmascorner
How about these big industries getting together with some of their profit and help out. I though the Socialist EU was suppose to be "all for one and one for all" mentality.
16:13 June 21, 2011 by SergieJ
The nicwe bankers and "industrialists" are so happy with their own euro-bonuses that they do not even understand that most of the population of Germany is now on the equivalent of starvation diet, as compared to the DMark times! Basically, the Greek "bailout is yet another scam designed at channeling "public" i.e. taxpayer money into the very private indivduals who have signed that petition - and anyone who sees that as "moral leadership" has, in all probability only heard about morality from other people. What an arrogant abomination this scam is! For any normal individual, the plea reads: people, let your grandchildren pay so that my grandchildren have more money to buy more ridiculous places and fuel for their pravate helicopters, indeed, they are so used to the helicopter by now that there is truly "no other way" - you cannot subject them to the horrors of traffic jams and feel human, can you, industrial workers of Greece and Germany?
18:09 June 21, 2011 by german-guardian
Germany and Europe must keep Euro strong. So the only way to keep it strong is to help a Euro member when they are financially in trouble. Even though it might not make sense economically, in the fututre it will benefit Germany by keeping Euro strong, and European union strong. You must understand with the rising power of Russia, China and other countries, Europe must be united to be strong. True friends in European union will help each other in hard times and happy times. A strong Europe, that has Germany as its leader.
18:29 June 21, 2011 by Lachner
I agree that a single currency for the European Union is better for economical, social and political reasons. What I don't understand is why do the people of countries that are doing things right have to bail out others that continue to spend and waste resources without any control. I say kick out Greece out of the EU and let them take care of their own mess with their own currency. As long as the EU keeps bailing them out, they will not change since they always have "Big Daddy" to send them money when they screw up.
18:34 June 21, 2011 by lunchbreak
I saw this all coming some years when I begged my friends to vote against the euro. Now germans are paying thru the nose to support not only the eastern part of the country but also the rest of europe. No wonder the german man and woman on the street are feeling the strain. My strong advice to germany is to bring back the deutschmark and let their neighbors learn to rely on themselves for a change.
19:10 June 21, 2011 by german-guardian
Listen, Germany will become the most powerful country, but to become that, it must strengthen the European Union. True friends help each others when truly in need. Sometimes helping your neighbors might not make sence at the current situation, but in the future it will make sense. Greeks have a lot of potential. They are an ancient country with good people who's help in the future can help Europe after all. Again, we Germans are not selfish. We must make a stronger Europe. Again you see that other countries like Russia, China, India are increasing their economical power, we must be stronger than them. After all those countries tend to act very unpredictably.
19:21 June 21, 2011 by mkvgtired
Before the Euro was introduced the German Mark made up ~14% of global reserves. The French Frank made up ~2%. After the Euro was introduced it comprised ~18% of global reserves. That being said, foreign governments only felt the other members' economies added 2% to the currency's strength. Germany basically spread its financial stability and muscle throughout the entire currency union to its own detriment.

I have been to Germany several times and it is almost unanimous that German's are against the Euro (maybe its just the ones I met). But it seems like more problems will arise if continental Europe's largest economy and strongest government continues to go against what such a large segment of its population wants it to do.
19:26 June 21, 2011 by ssn1978
@ German-guardian, very well said!!
19:26 June 21, 2011 by german-guardian
@ mkvgtired

You only have been in Germany few times and you think you know what all the 70 million Germans are thinking. This is called steriotyping. By seeing couple of people, you can not judge a whole nation.
20:10 June 21, 2011 by MJMH
The best name for the new Deutsche Mark has to be ...what you fill out the rest but do it soon because there isn't much time left.
20:25 June 21, 2011 by german-guardian
After World War 1, Our people in Germany had hard times because the German currency became very low value. Right now Euro is the currency and we will protect it from falling down.We Germans are honost and hardworking. We are a true friend to Greece and a true friends helps you when you are truly in need. Even though helping might not economically make sence. Yet in the future it will help us and Europe. We must build Europe strong, and Germany at its center. During the 1200s when the mongolians wanted to invade Europe, only the unity of the Teutonic knights and the other crusades defeated the mongols. A stronger Europe garantees our people's fututre. Greece is a country with a powerful history, and it is highly culture. We want to side with the high cultured nations. When a good nation is in trouble and week, its friends help, so when that nations has recovered, it will help us and Europe.
21:02 June 21, 2011 by jmclewis
The Euro makes travel and trade easier. The problem is The EU is telling countries it knows best the locals loose their voice and with it they can loose their culture. Industry and business wanted this, the countries where citizens were asked to vote it was a big no. The big countries now are paying the small and weak to keep them from collapsing and taking the EU down.

They should have made the Euro but used it as a travel and trade currency allowing the other to fluctuate against it.

Greece has to go, the banks and investors need to take the lost move only the Greeks can fix Greece.
21:23 June 21, 2011 by rwk
Greece has to be put in receivership. The government has to be taken over by the EU, and inefficiencies eliminated. Tax collection must be made real, not the joke that it is now. That is the only way I would consider giving more money to Greece, if I were in power. But I am not. I see Europe, particularly Germany, going to ruin as it eliminated nuclear power while at the same time rescuing the PIGS. Canada is beckoning me...
21:33 June 21, 2011 by Bushdiver
@ german-guardian.............You're full of crap! Sure big business and the banks would like to keep the Euro solvent. It helps all the big shots keep those huge bonis checks coming.
21:38 June 21, 2011 by mkvgtired
@german-guardian, that's why I put that qualifier in, I know I can not speak for all German people. Like I said virtually all the German's "I've talked to" about the Euro are against it. The statistics I posted above do not lie. The world has faith in Germany's economy, and to a much lesser extent France's. Other than that most of the other nations in the Eurozone do not add much to the currency's strength, and actually can take away from it.

You are clearly pro-Euro, and you know the costs of it. Most of the German people "I have talked to" are worried what will happen to their incomes if too many issues come up in Euro nations. Statistics show that the majority of Germans are pro-Euro. Maybe it was the cities I spent most of my time in (Berlin, Nuremberg, Munich)? Was not trying to stereotype, just giving my personal experiences.
22:09 June 21, 2011 by consumerxy
Milton Freeman the Nobel winner in economics said the Union would fail in 5-15 years. That without individual currencies a country could not react in a crises. In 2001 when Greece entered the Union it was with false fiscal information. The Spiegel and the UK Guardian are reporting this information within the last 2 days and took me 15 minutes to find. Why is it that the politicians and big business insist on urinating on you and at the same time telling you it is raining. The UK with their Pound Sterling knew going to the Euro was a bad idea and said we will wait and see. Waiting is over and now the taxpayer sees the incompetent politicians and big business cronies milking him beyond dry for their fiasco.
23:42 June 21, 2011 by Deutschguy
It's ridiculous to even consider dismantling the Euro or the EU. Everything is too interconnected, and Germany will face dire consequences, in terms of trade, tariffs, and jobs, if such a thing was attempted.

Germany is better off with the EU and the Euro. The bonded indebtedness of Greece that preceded the current crisis was managed and issued by Goldman Sachs. Greece and/or Goldman knew clearly at the point of entry that their books were not balanced and the unsustainable debt existed or would come due.

True, that Greece (and Italy) need better bookkeeping and more rational fiscal management like Germany and the northern countries. But the benefits of increased markets and trading partners outweigh those factors. The reticence to give the EU more power to oversee and enforce individual countries' fiscal operations is what led to this. So, the Euro skeptics who kept limiting EU enforcement powers are much to blame for this.

When there is transparency, bad behavior or cultures of irresponsibility can't be hidden. That's why the EU needs more power over individual states, not less. Otherwise, Germany and other European nations are left to argue over menial issues like banning smoking or gay marriage or shopping on Sundays.

Prioritize, please, and think.
00:07 June 22, 2011 by Logic Guy
Well, I'm sure there are Germany people who would rather leave the EU and EURO and return to an independent currency. However, Germany has done very well since the creation of the EU. The majority of Germans are now used to it. The real problem is due to the EU's operational structure. The only way the EU can succeed would be to TOTALLY INTEGRATE the economies of all nations. But no sane person would support this, in that this would reduce the quality of life in nations that are prosperous. Therefore the EURO is illogical!

Greeks and Germans are totally different people. They don't think the same. Therefore, how in the name of God can people expect the EU to function in harmony?

Sometimes less is more. A shrinkage of the EU would actually strenghten the union over the long-term. Why can't people understand this?
01:07 June 22, 2011 by mkvgtired
Deutchguy, Please see my comment from another article:

"What Goldman Sachs did with the Greek government is very common with many European sovereigns that issue debt in foreign currencies (i.e. USD, JPY). Clearly it worked in hiding the severity of the coming Greek crisis, it lowered their public debt to GDP ratio from 105.3% to 103.7%. A whopping 1.6% ten to eleven years ago! Sorry, you only have the Greeks and their outrageous spending to blame for this one. "

02:45 June 22, 2011 by german-guardian
After World War 1, Our people in Germany had hard times because the German currency became very low value. Right now Euro is our currency and we will protect it from falling down.We Germans are honost and hardworking. We are a true friend to Greece and a true friends helps you when you are truly in need. Even though helping might not economically make sence. Yet in the future it will help us and Europe. We must build Europe strong, and Germany at its center. During the 1200s when the mongolians wanted to invade Europe, only the unity of the Teutonic knights and the other crusades defeated the mongols. A stronger Europe garantees our people's fututre. Greece is a country with a powerful history, and it is highly culture. We want to side with the high cultured nations. When a good nation is in trouble and week, its friends help, so when that nations has recovered, it will help us and Europe. Germany's enemies want European union to break, so that they can isolate Germany. However Germany's bond to its neighbors is the strongest. By protecting Europe and Germany being at the center, we will help Europe to be strong, and we will save our civilization. Just think about the crusades unity that defeated their enemies.
04:37 June 22, 2011 by DrStrangelove
All this "standing together" and "fight for our values" rhetoric reminds me of the usual drivel being spouted when heading into some sort of stupid military adventure. The end will be exactly as ignominious - negotiating with the Vietkong or the Taliban, and a "honorable" retreat.

Greece is a basket case, and so is the Euro. Postponing the inevitable will simply make it more expensive.

Germany will go through another couple of years of adaptation, as it did after the reunification, and did again after the introduction of the Euro. But in the end it will come out on top again. Germany's opportunities for economic growth lie outside of Europe, not within.
06:59 June 22, 2011 by jmclewis
All of you EU lovers are trading convenience over nations Sovereignty, What makes Europe fun and nice is it is not homogenized like the USA! Your differing countries and cultures are your strength, not a weakness!

Greece joined the EU under fraudulent terms, this should void them remaining in the EU give them more money it will be gone too next year. Greece needs to make more products and provide more services they have to work of this debt they cannot keep borrowing more money and hope in time to pay it back.
10:24 June 22, 2011 by Deutschguy
Whenever somebody comes up with the word "sovereignty", I just laugh.

With international markets and big banks literally controlling economic policies across borders, the term 'sovereignty' is used as a shield to protect banking and establishment interests from regulation, pure and simple. And from transparency.

Ordinary working families are always at the mercy of these behemoth banking entities and routinely sold down the river by their (banksters) political puppets. The only time "sovereignty" is used is to manipulate the gullible into thinking their nation is 'special', 'under their citizen's control', or to keep away 'outsiders from interfering'. Meaning, don't scrutinize the most powerful interests, their irresponsible business practices, and inventions of financial instruments that make them a lot of money, but put entire economies at risk.

Any German or American or any countries' citizens who actually think they have an economic vested interest in "sovereignty", as it applies to cross border banking regs and fiscal transparency, is simply naïve and self-sabotaging.

Greece overspent and issued bonds to cover it, but it was with Goldman's blessing, who did not do due diligence on the actual ability of Greece to pay off that bonded indebtedness.
17:53 June 22, 2011 by koll
If Europe threaten Greece to recognize North Cyprus, Greece certainly will pay every cent of her debt. 60 % of Greece land belongs to government.If Greece privatize 10 % of her lands debt problem could be solved.

If Greece defaults many European Banks will go bankrupt, whether people or companies lost their bank deposits or governments face big debt burden to bailout them.

Greeks abuse Europe by lie and now threaten to default to get more money.

If North Europeans not stand firm on greeks, Spain Italy Portugal will declare bankruptcy due to public pressure rather than paying debts.

This will bring trillions of extra burden to North Europeans.
23:17 June 22, 2011 by Logic Guy
Well, although I'm don't claim to be a financial expert, however, I was just thinking

"What if the banks of Europe were to issue entirely new bonds, or notes, with the idea that they would eventually become a new currency, for nations such as Greece and Portugal?"

Banks that hold Greek debt would be the owners of the "new paper", without actually paying one dime for them. The new notes would actually be "A New Currency in Disguise", in an attempt to avoid panic in financial markets?

When we have a problem, the first thing is to find the correct solution, and then make a "Smooth Transition."
11:01 June 23, 2011 by MfromUSA
Logic Guy...........you are quite the entertainer.

Your ideas are about as thought provoking as a weiner schnitzel.
01:19 June 24, 2011 by Logic Guy
Well, CREATIVITY is what allowed Albert Einstein to become the greatest scientist ever.

"Growth is literally impossible, without new ideas and solutions." AD
01:40 June 24, 2011 by german-guardian
@ Logic Guy

Who said Eistein is the greatest. He is not. there are much more great scientists than him. Actually one of Einstein's inventions was the atomic bomb which is the most destructive evil weapons of all time. Both for humanity and earth. So I think, if Einstein never existed, we would not be much different. Exept there would be no atomic bomb
13:15 June 24, 2011 by lunchbreak
That big business is desperate to hold on the the euro which should give the rest of us pause. Since when has it ever been concerned about anything other than enriching itself to our detriment.
15:13 June 24, 2011 by Al uk
No surprise there then given that the Euro has been good for Germany ( Low borrowing costs and exchange rates)

As for Greece surely they are better out of it after all when you are in a hole you stop digging and borrowing more money to pay off the borrowing that already cannot afford is just madness.

Let the banks take it on the chin and if they fail thay fail just like ordinary an bussiness.

All they want to do is privatise the profits and socialise the debts
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