Um, "Hansel and Gretel" (if you mean Germany's government) are running the largest welfare state on that continent themselves. Not to mention having a welfare state is part of the treaties on European Union. Nobody wanted to get bailed out—or did you not notice that every country that got a bailout loan had their governments fall before they got them?
The failing welfare states of Europe need to understand that if Hansel and Gretel are going to bail their worthless posteriors out, Hansel and Gretel are going to demand fiscal authority
No, the German citizenry want nothing to do with bailout out other countries, not that the government is doing it, but instead issuing loans (still against the will of German citizens, and against the will of the citizens of the recipient countries). Lots of things happening here that do not make sense, and none of the above countries' economies were in trouble until the ECB started playing with interest rates.
Of course, Hansel and Gretel would rather have nothing to do with a bailout
I do admire your tenacity in working through the obscure “Hansel and Gretel” reference. Perhaps it was because of that exhausting effort that your reading comprehension failed.
Adjectives are included to partition sets into subsets. In this case the word “failing” distinguishes welfare states that are in crisis from those that aren’t, e.g. Germany. After all, if Germany wasn’t relatively healthy for the moment) it would be unable provide help. One reason Germany isn’t failing yet is the retirement age reforms pushed through in 2007.
Perhaps associated with the mental exhaustion involved in deciphering the “Hansel und Gretel” reference is the incorrect claim that “every country that got a bailout loan had their governments fall before they got them”. Both private banks (under pressure from their governments) and the ECB have made bailut loans (i.e. loans that would otherwise have been unavailable at the rates given or even at all) to the PIIGS’ governments before their governments fell. Feel free to check the ECB’s balance sheet. This isn’t a claim that I made in my post, but since you have raised it we might as well get it straight.
I would also caution you against thinking that ECB controls interest rates. It doesn’t control them any more than the Fed does. Both the Fed and the ECB can influence interest rates, but real factors in the economy will overwhelm anything a central bank can do.
The interest rates primarily reflect lenders’ views of credit risk. No one wants to take an explicit haircut or an implicit haircut through inflation or devaluation. If a lender does lender into a risky situation, higher interest rates will be demanded.
The culprit in Europe and the rest of the Western world is unsustainable welfare state spending. Different countries are at different points on the slippery slope to bankruptcy. The PIIGS are just the harbingers of the longer term future for everyone unless major policy changes are made.