Germany - Saving the Euro or Destroying It?

SORRY, DEAR READERS - we're having storms that are interferring with internet service. But today, let's summarize the situation in Europe,- not very reassuring and certainly not what we've been hearing from the EU leaders who continue to say that all's well in Euroland.~~~~~~~~~~~~~ FRANCE : Since 2008 there has been a 0.4% drop in the buying power of the French; a 0.1% drop in the actual consummation of the French, with a government analysis showing that the French no longer have enough available money in excess of their fixed expenses to afford credit purchases; and the French GDP has averaged 0.0%. Friday,15,000 dairy farmers dumped thousands of gallons of milk in several French cities to emphasize their increasingly impossible financial situation.~~~~~ CYPRUS : The government now estimates that cost of the bailout is €23 billion, not €17 billion as first thought. The Troika of the European Central Bank, the OMF and the European Union Commission have lost control of both growth and funding dimensions, but are not publicly saying what they know : "Key assumptions of the program are outdated if not totally obsolete." The IMF has not yet acknowledged that adherence to its operational principles would preclude it from lending to a country with an incomplete program design and a financing gap with no fixed arrangement for closing it. Accordong to PIMCO's CEO, "if the IMF decides to adhere to this approach, its ability to convince others to follow its lead on other rescues would be undermined further." And, of course, the greatest victims are the Cypriots themselves, who thought that European leaders would help them recover from a massive crisis. What they got from Europe is confusion and incoherence. Peter Rosenstreich, chief foreign exchange analyst at Swissquote Bank told CNBC Friday that he thinks Cyprus is being used as a test case for a euro zone exit. "But at this point I think what we're going to still see is Cyprus within the euro zone. I think there's no real catalyst at this point, while there's a lot of small little cuts... at this point the break up doesn't seem to be coming down the pipe," he said. The Eurogroup of finance ministers that oversees bailouts defended the plan, saying it is a viable plan, with ten billion Euros coming in from the program and all the other elements coming from the Cypriot government or the private sector by way of privatizations and the bail-in of the banks." ~~~~~ SLOVENIA and PORTUGAL : The Eurogroup met in Dublin on Friday to try to put some order in the Eurozone mess of bailouts, bank crises and a general economic malaise that is making any attempt to win the Euro currency battle more difficult. Slovenia, in the midst of a bank crisis, is trying to avoid requesting financial aid and the onerous Cyprus-like terms those loans are likely to have tied to any bailout. Earlier this week, the Organization for Economic Cooperation and Development(OECD) said the central European economy risks a "deep recession" and a "severe banking crisis." Meanwhile, Portugal fired a warning shot against austerity this week when its constitutional court rejected cost-cutting measures which are central to the €78 billion bailout it received in 2011, throwing its austerity program and aid into further doubt. An ECB/IMF/EU document leaked on Thursday suggested that Portugal could struggle to avoid a second bailout, given the significant rise in its financing needs in 2014 and 2015 and into the future. In a research note on Friday, Nick Spiro of Spiro Sovereign Strategy said the leaked paper "is alarmingly frank - to the point of undermining what little confidence there is in Portugal's adjustment program." He added that promoters and designers of the austerity-focused Eurozone reform programs "are struggling to appear credible....Although Germany is convinced the bitter medicine is necessary and is working, even some of its northern European allies, notably Holland, are finding it difficult to practice what they preach," said Spiro. He noted that in the Eurozone periphery, governments are being voted out of office (or can't even be formed as in Italy). ~~~~~ Dear readers, Europe is not only not improving, it is sinking deeper into recession and chronic fiscal and banking holes that seem incapable of being repaired. The Euro has put a drain on all of the EU and without the healthy German economy and public treasury, the Euro would undoubtedly be gone by now. Can Germany support the entire Eurozone forever? One is forced to ask why it would want to. German voters are asking the same question.