Germany Sunsets Solar Power - After Losing Over $130 billion

Germany, being the staunch advocate of climate change and global warming it is like much of the EU prided itself on being the "world champion” of solar power. They doled out billions of marks on subsidies for consumers and businesses to go solar to reduce Germany's carbon footprint in response to the 'settled science' propaganda pushed by the global warming cult.

Germans used that money to install a solar capacity of 7.5 gigawatts last year. And warum nicht, if Big Government was paying for it and Al Gore and the UN said it was just what they should be doing?

Actually, Big Government wasn't paying for all of it, as it turns out. Solar power users were allowed to receive a guaranteed above-market price for the electricity they sold back to energy grid which was financed by - surprise!- a tax on every household's electricity bill. That alone amounted last year to a subsidy of some €6 billion ($7.9 billion), which is estimated to add at least an average of $260 to German consumer's annual energy costs.

The German government, after going over the figures, has decided to pull the plug on solar subsidies. They will cut them at least 30% this year and phase them out entirely within five years. Given how much it has cost the German government, I wouldn't be surprised to see them gone entirely before the end of 2013, and that's only because of the unemployment entailed as German companies who went into solar technology to take advantage of the government-funded 'sunshine rush' lay off workers or go bust.

This particular green energy scam hit Germans in the pocketbook in various ways.

One of the chief problems with solar for a high wage country like Germany is the cost of manufacturing solar panels and installing them. This was something Big Government was subsidizing in the name of green jobs. Unfortunately, the solar panels can be manufactured far cheaper in China, so every one of those 'green jobs' ended up costing German taxpayers an average of $175,000. And as we've seen elsewhere, China is not exactly overly concerned about things like pollution, 'carbon footprints' or 'global warming'. Think of it as another huge Solyndra.

Germany's climate, like most of Northern Europe's is not exactly the sunniest in the world. That's particularly true in the winter, when energy use peaks because of heating costs. When the winter days are short and the weather is overcast, Germany's solar power investment generates hardly anything - which means the Germans have to import traditional energy from power plants, some of them coal powered, in places like France, Poland and the Czech Republic. Not only that, but because the EU instituted the cap n' trade nonsense President Obama tried to have his EPA impose here, what the whole program has amounted to is a transfer of wealth to poorer EU countries:

Indeed, despite the massive investment, solar power accounts for only about 0.3 percent of Germany’s total energy. This is one of the key reasons why Germans now pay the second-highest price for electricity in the developed world (exceeded only by Denmark, which aims to be the “world wind-energy champion”). Germans pay three times more than their American counterparts.

Moreover, this sizeable investment does remarkably little to counter global warming. Even with unrealistically generous assumptions, the unimpressive net effect is that solar power reduces Germany’s CO2 emissions by roughly 8 million metric tons—or about 1 percent – for the next 20 years. To put it another way: By the end of the century, Germany’s $130 billion solar panel subsidies will have postponed temperature increases by 23 hours.

Using solar, Germany is paying about $1,000 per ton of CO2 reduced. The current CO2 price in Europe is $8. Germany could have cut 131 times as much CO2 for the same price. Instead, the Germans are wasting more than 99 cents of every euro that they plow into solar panels.

It gets worse: Because Germany is part of the European Union Emissions Trading System, the actual effect of extra solar panels in Germany leads to no CO2 reductions, because total emissions are already capped. Instead, the Germans simply allow other parts of the EU to emit more CO2. Germany’s solar panels have only made it cheaper for Portugal or Greece to use coal.

Solar energy can be a good idea in places that it was better designed to work, especially with active systems that capture the excess energy for use when the sun doesn't shine. Israel in particular has made massive strides in both the technology used to capture the energy and in manufacturing the panels more efficiently. There are even solar generators that can be used as an emergency backup in case of power failures. But having government subsidize it in the name of Holy Gaia and climate change has turned out to be a spectacularly bad idea in Germany and everywhere else it's been tried.

Remember this cautionary tale when you hear President Obama mouthing off about energy in his quest for re-election. There's no doubt if he gets back in, we'll seen even more of our wealth squandered on green energy scams like Solyndra run by his donors and cronies.

Germany Sunsets Solar Power - After Losing Over $130 billion

Germany, being the staunch advocate of climate change and global warming it is like much of the EU prided itself on being the "world champion” of solar power. They doled out billions of marks on subsidies for consumers and businesses to go solar to reduce Germany's carbon footprint in response to the 'settled science' propaganda pushed by the global warming cult.

Germans used that money to install a solar capacity of 7.5 gigawatts last year. And warum nicht, if Big Government was paying for it and Al Gore and the UN said it was just what they should be doing?

Actually, Big Government wasn't paying for all of it, as it turns out. Solar power users were allowed to receive a guaranteed above-market price for the electricity they sold back to energy grid which was financed by - surprise!- a tax on every household's electricity bill. That alone amounted last year to a subsidy of some €6 billion ($7.9 billion), which is estimated to add at least an average of $260 to German consumer's annual energy costs.

The German government, after going over the figures, has decided to pull the plug on solar subsidies. They will cut them at least 30% this year and phase them out entirely within five years. Given how much it has cost the German government, I wouldn't be surprised to see them gone entirely before the end of 2013, and that's only because of the unemployment entailed as German companies who went into solar technology to take advantage of the government-funded 'sunshine rush' lay off workers or go bust.

This particular green energy scam hit Germans in the pocketbook in various ways.

One of the chief problems with solar for a high wage country like Germany is the cost of manufacturing solar panels and installing them. This was something Big Government was subsidizing in the name of green jobs. Unfortunately, the solar panels can be manufactured far cheaper in China, so every one of those 'green jobs' ended up costing German taxpayers an average of $175,000. And as we've seen elsewhere, China is not exactly overly concerned about things like pollution, 'carbon footprints' or 'global warming'. Think of it as another huge Solyndra.

Germany's climate, like most of Northern Europe's is not exactly the sunniest in the world. That's particularly true in the winter, when energy use peaks because of heating costs. When the winter days are short and the weather is overcast, Germany's solar power investment generates hardly anything - which means the Germans have to import traditional energy from power plants, some of them coal powered, in places like France, Poland and the Czech Republic. Not only that, but because the EU instituted the cap n' trade nonsense President Obama tried to have his EPA impose here, what the whole program has amounted to is a transfer of wealth to poorer EU countries:

Indeed, despite the massive investment, solar power accounts for only about 0.3 percent of Germany’s total energy. This is one of the key reasons why Germans now pay the second-highest price for electricity in the developed world (exceeded only by Denmark, which aims to be the “world wind-energy champion”). Germans pay three times more than their American counterparts.

Moreover, this sizeable investment does remarkably little to counter global warming. Even with unrealistically generous assumptions, the unimpressive net effect is that solar power reduces Germany’s CO2 emissions by roughly 8 million metric tons—or about 1 percent – for the next 20 years. To put it another way: By the end of the century, Germany’s $130 billion solar panel subsidies will have postponed temperature increases by 23 hours.

Using solar, Germany is paying about $1,000 per ton of CO2 reduced. The current CO2 price in Europe is $8. Germany could have cut 131 times as much CO2 for the same price. Instead, the Germans are wasting more than 99 cents of every euro that they plow into solar panels.

It gets worse: Because Germany is part of the European Union Emissions Trading System, the actual effect of extra solar panels in Germany leads to no CO2 reductions, because total emissions are already capped. Instead, the Germans simply allow other parts of the EU to emit more CO2. Germany’s solar panels have only made it cheaper for Portugal or Greece to use coal.

Solar energy can be a good idea in places that it was better designed to work, especially with active systems that capture the excess energy for use when the sun doesn't shine. Israel in particular has made massive strides in both the technology used to capture the energy and in manufacturing the panels more efficiently. There are even solar generators that can be used as an emergency backup in case of power failures. But having government subsidize it in the name of Holy Gaia and climate change has turned out to be a spectacularly bad idea in Germany and everywhere else it's been tried.

Remember this cautionary tale when you hear President Obama mouthing off about energy in his quest for re-election. There's no doubt if he gets back in, we'll seen even more of our wealth squandered on green energy scams like Solyndra run by his donors and cronies.

Germany To Sell Israel A Sixth Dolphin Class Submarine

The Israeli navy has contracted with Germany for a sixth Dolphin-class submarine, to be built at the Howaldtswerke-Deutche Werft AG (HDW) shipyard, in the Baltic city of Kiel.

According to the Jerusalem Post:

“Christian Schmidt, [Germany’s] secretary of state for defense, told the Post that the contract was signed a few weeks ago and that Germany had agreed to subsidize its cost…. The submarines under construction will be fitted with a new [AIP] propulsion system…. Schmidt said that Germany was looking to increase its defense cooperation with Israel and was specifically interested in learning from the IDF about training and military doctrine. He said that Germany was also considering buying the Heron TP long-range unmanned aerial vehicle later this decade to replace the Heron 1 it is operating in Afghanistan.

The Israeli Navy already has two additional Dolphins being built that wil be delivered later this year.

The Dolphin is a pretty neat little craft with a nasty sting and a cruising range of 4,500 km/ 2,700 miles. That makes some potentially interesting targets in Iran or Hezbollah's bases in Lebanon easily reachable for Israel's “Popeye Turbo” cruise missiles, which can be fired from four of the ten torpedo tubes, which can also fire torpedoes or anti-ship missiles like Boeing’s UGM-86 Harpoons.The Dolphins also have a wet and dry compartment for deploying underwater frogmen and commandos.

The Israelis are rumored to have done tests with a nuclear-capable version of the Popeye as well, and if they follow their usual procedure, they will also provide the new sub with a few innovations all their own.

Germany To Sell Israel A Sixth Dolphin Class Submarine

The Israeli navy has contracted with Germany for a sixth Dolphin-class submarine, to be built at the Howaldtswerke-Deutche Werft AG (HDW) shipyard, in the Baltic city of Kiel.

According to the Jerusalem Post:

“Christian Schmidt, [Germany’s] secretary of state for defense, told the Post that the contract was signed a few weeks ago and that Germany had agreed to subsidize its cost…. The submarines under construction will be fitted with a new [AIP] propulsion system…. Schmidt said that Germany was looking to increase its defense cooperation with Israel and was specifically interested in learning from the IDF about training and military doctrine. He said that Germany was also considering buying the Heron TP long-range unmanned aerial vehicle later this decade to replace the Heron 1 it is operating in Afghanistan.

The Israeli Navy already has two additional Dolphins being built that wil be delivered later this year.

The Dolphin is a pretty neat little craft with a nasty sting and a cruising range of 4,500 km/ 2,700 miles. That makes some potentially interesting targets in Iran or Hezbollah's bases in Lebanon easily reachable for Israel's “Popeye Turbo” cruise missiles, which can be fired from four of the ten torpedo tubes, which can also fire torpedoes or anti-ship missiles like Boeing’s UGM-86 Harpoons.The Dolphins also have a wet and dry compartment for deploying underwater frogmen and commandos.

The Israelis are rumored to have done tests with a nuclear-capable version of the Popeye as well, and if they follow their usual procedure, they will also provide the new sub with a few innovations all their own.

UK's Cameron Vetoes Changes to EU Treaty..France And Germany Outraged

The efforts to save the eurozone took another body blow as UK PM David Cameron exercised, for the first time, the UK's veto over major changes to the Eu treaty France and Germany worked out.

The new changes amounted to “automatic consequences” for countries whose public deficit exceeds 3 per cent of gross domestic product and a cap on countries’ structural deficits at 0.5 per cent. The tighter rules would be also be entered in the individuals laws of member countries, and the 'consequences' would be enforced by the other 27 members.

This is a fairly shocking abandonment of national sovereignty, and the French in particular were originally not planning to agree with it. But Germany's Angela Merkel was able to get France's Nicholas Sarkozy to capitulate.

And then Britain threw a monkey wrench into the entire structure by vetoing it. That led to several other countries refusing to go along until they 'consulted with their parliaments', namely Denmark, Sweden, The Czech Republic and Hungary.

PM Cameron's main sticking point was that he wanted secure safeguards for the single market and the City of London's financial infrastructure, and France and Germany refused to provide them..

'There are some real problems and nonsense there in terms of having safe and secure financial services, some deep unfairnesses that are currently in the system that I feel badly need to be addressed,' he said.

'You've got everyone else in the room saying give up your national interests, just go along with what everyone else wants, that would be the easy, comfortable, convenient thing to do. But it wasn't the right thing to do, so you've got to stick to your guns.'

France's President Sarkozy was particularly incensed at this, perhaps because he had caved in to Germany's demands in the face of considerable political pressure not to.

'What was on offer is not in Britain's interest so I didn't agree to it,' Cameron told reporters in Brussels.

'We're not in the euro and I'm glad we're not in the euro.'

'We're never going to join the euro and we're never going to give up this kind of sovereignty that these countries are having to give up.'

Merkel and Sarkozy are essentially ignoring the UK's veto and announced their plans to go ahead with finalizing the agreement,which is due to be signed in March.While this huge alteration of the Lisbon Treaty should normally signal referendums in the individual countries,there's no sign that this is going to happen. José Manuel Barroso, the European Commission president was quoted as saying that in his opinion,these difficulties could be "worked around."

In other words, they'll just impose it. Greece, Portugal,Ireland,Spain and Italy aren't going to squawk since they're in deep financial trouble and France and Germany are already on board,although it remains to be seen how long.

So why do these European shenanigans matter on this side of the pond? Well, among other things, thanks to President Obama, we're likely going to be footing the bill for a big chunk of the bail out cost.

Bypassing Congress,of course.

please donate...it helps me write more gooder!

UK's Cameron Vetoes Changes to EU Treaty..France And Germany Outraged

The efforts to save the eurozone took another body blow as UK PM David Cameron exercised, for the first time, the UK's veto over major changes to the Eu treaty France and Germany worked out.

The new changes amounted to “automatic consequences” for countries whose public deficit exceeds 3 per cent of gross domestic product and a cap on countries’ structural deficits at 0.5 per cent. The tighter rules would be also be entered in the individuals laws of member countries, and the 'consequences' would be enforced by the other 27 members.

This is a fairly shocking abandonment of national sovereignty, and the French in particular were originally not planning to agree with it. But Germany's Angela Merkel was able to get France's Nicholas Sarkozy to capitulate.

And then Britain threw a monkey wrench into the entire structure by vetoing it. That led to several other countries refusing to go along until they 'consulted with their parliaments', namely Denmark, Sweden, The Czech Republic and Hungary.

PM Cameron's main sticking point was that he wanted secure safeguards for the single market and the City of London's financial infrastructure, and France and Germany refused to provide them..

'There are some real problems and nonsense there in terms of having safe and secure financial services, some deep unfairnesses that are currently in the system that I feel badly need to be addressed,' he said.

'You've got everyone else in the room saying give up your national interests, just go along with what everyone else wants, that would be the easy, comfortable, convenient thing to do. But it wasn't the right thing to do, so you've got to stick to your guns.'

France's President Sarkozy was particularly incensed at this, perhaps because he had caved in to Germany's demands in the face of considerable political pressure not to.

'What was on offer is not in Britain's interest so I didn't agree to it,' Cameron told reporters in Brussels.

'We're not in the euro and I'm glad we're not in the euro.'

'We're never going to join the euro and we're never going to give up this kind of sovereignty that these countries are having to give up.'

Merkel and Sarkozy are essentially ignoring the UK's veto and announced their plans to go ahead with finalizing the agreement,which is due to be signed in March.While this huge alteration of the Lisbon Treaty should normally signal referendums in the individual countries,there's no sign that this is going to happen. José Manuel Barroso, the European Commission president was quoted as saying that in his opinion,these difficulties could be "worked around."

In other words, they'll just impose it. Greece, Portugal,Ireland,Spain and Italy aren't going to squawk since they're in deep financial trouble and France and Germany are already on board,although it remains to be seen how long.

So why do these European shenanigans matter on this side of the pond? Well, among other things, thanks to President Obama, we're likely going to be footing the bill for a big chunk of the bail out cost.

Bypassing Congress,of course.

please donate...it helps me write more gooder!

The Eurozone Under The Gun: France And Germany At Odds

Saving the eurozone has come down to two countries, France and Germany. President Sarkozy and Chancellor Merkel are meeting today to try and craft a common proposal to save the eurozone and the EU,but their differences are fairly wide.

The Germans are desperate to preserve the eurozone because their economy depends on exports, and returning to the Deutschmark would create a rise in the prices of German products. On the other hand, German taxpayers are fed up with costly bailouts.

Merkel wants a 'federalized' eurozone to enforce budget discipline and to have euro zone states surrender the control of their budgets to a European authority with veto power and the ability to punish governments that step out of line.

France opposes this, and Sarkozy, with only five months to go before elections, is taking major criticism from his political opposition and the press over handing French sovereignty to unelected EU officials.

At that, a proposal along the lines of what the Germans want might necessitate a change in the EU treaty.

It'll be interesting to see what they come up with.

Meanwhile, Italy has joined Greece, Spain, Ireland and Portugal as another country whose debt is out of control and may need an EU bailout.

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The Eurozone Under The Gun: France And Germany At Odds

Saving the eurozone has come down to two countries, France and Germany. President Sarkozy and Chancellor Merkel are meeting today to try and craft a common proposal to save the eurozone and the EU,but their differences are fairly wide.

The Germans are desperate to preserve the eurozone because their economy depends on exports, and returning to the Deutschmark would create a rise in the prices of German products. On the other hand, German taxpayers are fed up with costly bailouts.

Merkel wants a 'federalized' eurozone to enforce budget discipline and to have euro zone states surrender the control of their budgets to a European authority with veto power and the ability to punish governments that step out of line.

France opposes this, and Sarkozy, with only five months to go before elections, is taking major criticism from his political opposition and the press over handing French sovereignty to unelected EU officials.

At that, a proposal along the lines of what the Germans want might necessitate a change in the EU treaty.

It'll be interesting to see what they come up with.

Meanwhile, Italy has joined Greece, Spain, Ireland and Portugal as another country whose debt is out of control and may need an EU bailout.

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Netanyahu Was Blackmailed By Germany To Release 'Palestinian' Funds

You may remember last week that Benyamin Netanyahu and the Israeli cabinet caved in to pressure and made the decision to resume the release of tax funds to the Hamas-allied 'Palestinian' Authority.The funds were suspended after the 'Palestinians' violated the Road Map and the Oslo Accords by making an attempt to bypass negotiations with Israel with an unsuccessful unilateral declaration of statehood at the UN and a successful bid to become a full member of UNESCO.

I along with many others criticized Netanyahu for folding, but I also cautioned my readers that such decisions don't happen in a vacuum and Israel and Netanyahu obtained a quid pro quo behind the scenes for acquiescing to this folly.

It turns out that Netanyahu didn't cave in at all - he was simply blackmailed.



According to the German newspaper Welt am Sonntag, German Chancellor Angela Merkel threatened Prime Minister Netanyahu with cancelling a German agreement to deliver a sixth Dolphin-class submarine to Israel unless Israel resumed the transfer of funds to the Palestinian Authority.

Directly after Israel announced it would resume transferring the funds, a German government official announced that Germany would not only build and deliver the submarine to the Israeli navy, but pay up to one-third of the construction cost.

At the time of this writing, the sum the Germans have agreed to underwrite amounts to 135 million euros, the equivalent of $182.4 million dollars while the amount of money released to the 'Palestinian' Authority amounted to about $130 million.

In addition the new submarine, which like all of Israel dolphin subs can fire cruise missiles and support nuclear weapons enhances Israel's deterrent strike capability quite nicely, especially if things heat up with Iran.

So in retrospect, Netanyahu didn't cave. He made a rational choice and received a sixth submarine Israel needed at a 30% discount that amounted to substantially more than he was giving up to the 'Palestinians'. I would have made the same decision.

Now, why the Germans would do this is another story. Germany's ship building industry is in dire straits and they certainly needed the work. But on the other hand, Germany is one of Iran's biggest trading partners, and the new submarine might be used in hostilities that could affect that particular bottom line severely.

It may simply have been a case of political correctness run amuck and coalition politics with the German left needed by Merkel to sell the new eurozone preservation deal she's working on to the Bundestag.

( hat tip, Carl)

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Netanyahu Was Blackmailed By Germany To Release 'Palestinian' Funds

You may remember last week that Benyamin Netanyahu and the Israeli cabinet caved in to pressure and made the decision to resume the release of tax funds to the Hamas-allied 'Palestinian' Authority.The funds were suspended after the 'Palestinians' violated the Road Map and the Oslo Accords by making an attempt to bypass negotiations with Israel with an unsuccessful unilateral declaration of statehood at the UN and a successful bid to become a full member of UNESCO.

I along with many others criticized Netanyahu for folding, but I also cautioned my readers that such decisions don't happen in a vacuum and Israel and Netanyahu obtained a quid pro quo behind the scenes for acquiescing to this folly.

It turns out that Netanyahu didn't cave in at all - he was simply blackmailed.



According to the German newspaper Welt am Sonntag, German Chancellor Angela Merkel threatened Prime Minister Netanyahu with cancelling a German agreement to deliver a sixth Dolphin-class submarine to Israel unless Israel resumed the transfer of funds to the Palestinian Authority.

Directly after Israel announced it would resume transferring the funds, a German government official announced that Germany would not only build and deliver the submarine to the Israeli navy, but pay up to one-third of the construction cost.

At the time of this writing, the sum the Germans have agreed to underwrite amounts to 135 million euros, the equivalent of $182.4 million dollars while the amount of money released to the 'Palestinian' Authority amounted to about $130 million.

In addition the new submarine, which like all of Israel dolphin subs can fire cruise missiles and support nuclear weapons enhances Israel's deterrent strike capability quite nicely, especially if things heat up with Iran.

So in retrospect, Netanyahu didn't cave. He made a rational choice and received a sixth submarine Israel needed at a 30% discount that amounted to substantially more than he was giving up to the 'Palestinians'. I would have made the same decision.

Now, why the Germans would do this is another story. Germany's ship building industry is in dire straits and they certainly needed the work. But on the other hand, Germany is one of Iran's biggest trading partners, and the new submarine might be used in hostilities that could affect that particular bottom line severely.

It may simply have been a case of political correctness run amuck and coalition politics with the German left needed by Merkel to sell the new eurozone preservation deal she's working on to the Bundestag.

( hat tip, Carl)

please donate...it helps me write more gooder!

The EU's Big Fat Greek Bailout

The EU leaders, led by Germany's Chancellor Angela Merkel and France's President Nicholas Sarkozy have reached a deal for a second Greek bailout.

The deal involves a new €130 billion bailout of Greece by the European Union and the International Monetary Fund (which means American taxpayers are going to take a bite of this particular sandwich), and acceptance by current Greek bond holders of fifty percent of face value and a increase in the EU's bailout fund to over €1 trillion.

As Chancellor Merkel announced with a straight face, the goal of all this manipulation is to get Greece's debt down to - wait for it - a mere 120% of the country's gross domestic product by 2020.

President Sarkozy announced that he would hit up the Chinese to see if they're willing to pony up any cash to help in supporting the fund.

A number of details remain deliberately vague, which was probably the intent to get some kind of consensus and just try to muddle through somehow.

For example, under the terms of the deal, Greece agreed to pay €15 billion back into the EU's bailout fund, the European Financial Stability Facility(EFSF). The money is supposed to come from additional revenues raised by a vast Greek privatization plan, which would see a lot of functions currently run by the government go into private management.Unfortunately, the international monitors have already reported that Greece isn't going to be able to come up with the €50 billion for the EFSF from privatization it already pledged earlier this year, and this new €15 billion is supposed to come on top of the money the Greeks have already been unable to pay back.

The most inadvertently hilarious quote on this particular item came from Yves Leterme, the Prime Minister of Belgium, a country not exactly noted for its sense of humor. When he was asked by reporters whether adding another €15 billion to Greece’s expected pay back to the bailout fund out of expected revenues from privatization was realistic when the Greeks couldn't come up with the €50 billion from privatization they'd already committed to, he replied: “This element was not a necessity for Belgium.”

Another interesting bit that promises future fireworks came from George Osbourne, Britain's Chancellor of the Exchequer, the equivalent of America's Secretary of the treasury.He's claiming that Britain (which is already in financial straits) won't pay into the bailout fund out of its its IMF contributions. Moreover, he doubled down and is insisting that the IMF's mandate doesn't allow any cash to go into the bailout fund. Since there's no other place the money can conceivably come from except perhaps the Chinese, this is another of those little details that looks like it's being left to work out later.

Another problem with all this has to do with the internal problems of Greece itself.The EU has apparently realized belatedly that the country is one of the most corrupt in Europe, has a poisonous investment climate, a government fully prepared to cook the books and and little besides tourism as a source of revenue. So Chancellor Merkel is demanded the EU put what she describe as 'monitoring' in place to try and make some kind of order out of this.

"There will be a reinforced monitoring regime in connection with the fulfillment of the Greek obligations," she said.

"That will be anchored in a memorandum of understanding. There will be a permanent presence there. It will be possible to monitor the measures taken by Greece. I think that this is better than when every three months a 'troika' travels there and back, a permanent system of supervision."

Viel glück damit, Madame ReichsKanzler.

If this all seems like simply kicking the can down the road, I couldn't agree more. And that's going to become even more obvious when further bailouts are needed for countries like Spain, Ireland and Portugal, among others.

please donate...it helps me write more gooder!

The EU's Big Fat Greek Bailout

The EU leaders, led by Germany's Chancellor Angela Merkel and France's President Nicholas Sarkozy have reached a deal for a second Greek bailout.

The deal involves a new €130 billion bailout of Greece by the European Union and the International Monetary Fund (which means American taxpayers are going to take a bite of this particular sandwich), and acceptance by current Greek bond holders of fifty percent of face value and a increase in the EU's bailout fund to over €1 trillion.

As Chancellor Merkel announced with a straight face, the goal of all this manipulation is to get Greece's debt down to - wait for it - a mere 120% of the country's gross domestic product by 2020.

President Sarkozy announced that he would hit up the Chinese to see if they're willing to pony up any cash to help in supporting the fund.

A number of details remain deliberately vague, which was probably the intent to get some kind of consensus and just try to muddle through somehow.

For example, under the terms of the deal, Greece agreed to pay €15 billion back into the EU's bailout fund, the European Financial Stability Facility(EFSF). The money is supposed to come from additional revenues raised by a vast Greek privatization plan, which would see a lot of functions currently run by the government go into private management.Unfortunately, the international monitors have already reported that Greece isn't going to be able to come up with the €50 billion for the EFSF from privatization it already pledged earlier this year, and this new €15 billion is supposed to come on top of the money the Greeks have already been unable to pay back.

The most inadvertently hilarious quote on this particular item came from Yves Leterme, the Prime Minister of Belgium, a country not exactly noted for its sense of humor. When he was asked by reporters whether adding another €15 billion to Greece’s expected pay back to the bailout fund out of expected revenues from privatization was realistic when the Greeks couldn't come up with the €50 billion from privatization they'd already committed to, he replied: “This element was not a necessity for Belgium.”

Another interesting bit that promises future fireworks came from George Osbourne, Britain's Chancellor of the Exchequer, the equivalent of America's Secretary of the treasury.He's claiming that Britain (which is already in financial straits) won't pay into the bailout fund out of its its IMF contributions. Moreover, he doubled down and is insisting that the IMF's mandate doesn't allow any cash to go into the bailout fund. Since there's no other place the money can conceivably come from except perhaps the Chinese, this is another of those little details that looks like it's being left to work out later.

Another problem with all this has to do with the internal problems of Greece itself.The EU has apparently realized belatedly that the country is one of the most corrupt in Europe, has a poisonous investment climate, a government fully prepared to cook the books and and little besides tourism as a source of revenue. So Chancellor Merkel is demanded the EU put what she describe as 'monitoring' in place to try and make some kind of order out of this.

"There will be a reinforced monitoring regime in connection with the fulfillment of the Greek obligations," she said.

"That will be anchored in a memorandum of understanding. There will be a permanent presence there. It will be possible to monitor the measures taken by Greece. I think that this is better than when every three months a 'troika' travels there and back, a permanent system of supervision."

Viel glück damit, Madame ReichsKanzler.

If this all seems like simply kicking the can down the road, I couldn't agree more. And that's going to become even more obvious when further bailouts are needed for countries like Spain, Ireland and Portugal, among others.

please donate...it helps me write more gooder!