The New Siegfried Line: Merkel Dismisses EuroBonds and EuroFDIC While Spain and Cyprus Seek Aid

Confounded Interest ^ | 06/25/2012 | Anthony B. Sanders

[whitedog57]

Chancellor Angela Merkel hardened her resistance to euro-area debt sharing to resolve the region’s financial crisis, setting Germany on a collision course with its allies at a summit of European leaders this week. Merkel, speaking to a conference in Berlin today as Spain announced it would formally seek aid for its banks, dismissed “euro bonds, euro bills and European deposit insurance with joint liability and much more” as “economically wrong and counterproductive,” saying that they ran against the German constitution. [Bloomberg]

So it seems that the Germans are building a new Siegfried Line to protect itself from France and other EU financial invaders.

The reaction in bond markets is a rise in sovereign yields for the PIGS (Portugal, Italy, Greece and Spain).

And the Dollar/Euro rate fell.

Now Cyprus is requesting financial assistance from the euro area’s bailout funds, the government said in an e-mailed statement. [They e-mailed a bailout request?]

The smell of fear from the Eurozone is helping to send commodities highers. Corn? I doubt it is Ethanol.

Germany had better hope that their resistance to the insistence on a German bailout of the EU (including billionaire George Soros) works better than France’s Maginot Line (which the Germans just drove around in World War II).

[whitedog57]

The EU is collapsing and Germany is trying to protect itself. This is going to be a HOT summer.

Love this economist's graphs.