Free Republic

“No more billions for the greedy Greeks” or “Merkel shoots down new proposals from Athens”: these are just a couple of the bold headlines Germans have digested with their morning coffee in recent months. In a country still massively reliant on traditional forms of media—newspapers, and above all television—for its news, these headlines matter. […] Political discussion on TV is dominated by talk shows such as Anne Will, Günther Jauch and Hart aber Fair (Hard but Fair), where although people outside the mainstream may be invited, “counter-opinions are generally squashed or have little chance of piercing through,” Mühl-Benninghaus pointed out....

The European Union’s executive Commission said Monday that membership in the euro bloc is “irrevocable” but left it open to what extent Greece could renegotiate the terms after elections on Jan. 25. Greece’s left-wing Syriza party leads the polls ahead of the elections and is in favor of changing the conditions of the country’s international bailout deal. That would likely anger the rest of the eurozone, which has given Athens the bulk of the rescue loans. […] EU spokeswoman Annika Breidthardt said Monday that if the Greek elections call for a need to reconsider the conditions of Athens’ membership within...

Germany’s highest court ruled on Tuesday that the European bailout fund, the ESM, was in line with the country’s constitution, throwing out numerous objections by euroskeptics. Confirming a preliminary ruling dating from September 2012, the Federal Constitutional Court said it saw no obstacles to Germany taking part in the €500-billion European Stability Mechanism, set up to bail out troubled countries and their banks. Nevertheless, in the ruling, presiding judge Andreas Voßkuhle insisted that it must be “the Bundestag [lower house of parliament] which retains sole responsibility over Germany’s public income and spending, even with regard to its international and European...

A new study shows that Germany contributes less per person to the permanent euro bailout fund than residents of several other countries in the European Union. Luxembourg, Holland and Ireland are among the nations paying more per capita. … EU member states have contributed some €48 billion ($65 billion) to the rescue authority to date. The cash contribution of the ESM is expected to increase to a total of €80 billion ($108 billion) by mid-2014, with the next installment due in October. …

The European Union’s finance ministers today decided to give Ireland and Portugal an extra seven years to pay back loans granted to them as part of their bailouts. The decision, taken by ministers at their meeting in Dublin, should make it easier for those countries to leave their bailout programs and return to normal bond financing markets in the coming months. … Ireland was forced into a €67.5 billion ($88.3 billion) rescue in November 2010 and will receive its last installment in November this year. Portugal obtained a deal worth €78 billion ($102 billion) in May 2011 and will receive...

Euphoria over a lifeline of up to €100 billion ($125 billion) to rescue Spain's hurting banks morphed into a financial markets rout in a matter of hours Monday, as investors digested the still-undefined plan and became concerned the country may be unable to repay the new loans. The rate on Spanish 10-year bonds—a measure of market trust in a country's ability to repay debt—rose to an alarmingly high yield of 6.47 percent at the close of trading after falling to 6 percent in the morning. And the benchmark IBEX-35 stock index closed down 0.5 percent after surging 6 percent in...

Eurozone finance ministers agreed on Saturday to lend Spain up to €100 billion ($125 billion) to shore up its teetering banks, and Madrid said it would specify precisely how much it needs once independent audits report in just over a week. After a 2½-hour conference call of the 17 finance ministers, which several sources described as heated, the Eurogroup and Madrid said the amount of the bailout would be sufficiently large to banish any doubts. "The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to €100 billion in total," a Eurogroup statement...

There will likely be a lot of thoughts to come with regard to the E.U.'s nearly $1 trillion package of bailout loans, but the most glaring issue is that, despite its enormous size and scope, Europe's new 'solution' misses the root of the Eurozone debt problem and worse yet could be amplifying it. The underlying problem behind everything is moral hazard. So why are they rewarding it like never before? The walls of fiscal and economic sovereignty are being breached. No EMU country will be allowed to default, whatever the moral hazard. Interestingly, Europe's debt crisis has thus been a...