German rulers out of touch?

As I was wading through last Thursday’s copy of Die Zeit, I was hit with a full-page ad from a group which is trying to bring a radical perspective to autumn’s national election here in Germany (which is currently looking a foregone conclusion, so great is Merkel's lead over the SDP in the polls) .
"Das Generationen-Manifesto" gives first ten short but blunt warnings -

WE CAUTION - In the interest of future generations and the social and ecological balance
 1 Climate change is the biggest threat we have ever experienced. The federal government and all parties are not treating the issue with the highest priority. The  life and well-being of future generations is being put at risk.

 2 The energy revolution, the most important project of our generation is being dealt with in a half-hearted and inconsistent way by policy makers . We will make them liable if they negligently endanger the chances of this future project because of party political power games.

 3 The rulers govern past us citizens . They hide in their ivory towers, without explaining what consequences will result from far-reaching political decisions (eg energy policy and euro crisis) for our lives and the lives of our children.

 4 The present policy places massive debts on the shoulders of our children and grandchildren. The government deficit is further increased rather than reduced, and thus the scope of the next generations curtailed dramatically.

 5 Profits are privatized, losses socialized. Our rulers have been seduced by the financial industry and disregards the interests of the citizens.

 6 Politicians are splitting society with their inaction. Recent years have seen the divergence between rich and poor increase to an unacceptable degree.

 7 We are increasing our prosperity at the expense of people in the emerging and developing countries, who often work under inhumane conditions for us. It is a shame that we struggle with obesity and excess, while the rest of the world millions of people don’t even have the basic necessities of life.

 8 Our education system is failing miserably in the face of challenges posed by the future. Policy-makers from politics, economy and society know that our education system is unfair and opaque and not prepare our children for future learning content requirements. But there is a lack of courage for radical change.

 9 The sustainable modernization of the economy is demanded in speeches, but not taken seriously. Unless subsidies overtook place in trendsetting industries and technologies are directed, we forego the opportunities that present themselves to Germany as an international pioneer of a green or blue economic change.

 10. The generational contract has been terminated unilaterally. The present generation of parents and grandparents are protecting their own vested rights at the expense of their children and grandchildren.

The signatories include one particularly famous name – that of Professor Ernest von Weizsacker, one of the country’s most prominent intellectuals; writer on ecological and sustainable issues (and brother of Richard, from 1984-94. the country’s most respected President). Otherwise, the list of 28 signatories seems to consist mainly of actors, writers and Foundation people - with one bank President. The manifesto goes on to set out 10 demands which, for me, are curiously light on detail - 

WE DEMAND - courage, honesty and generational just action
 1 The fight against climate change must be taken as a national objective in the Constitution. A law passed at the beginning of the new term climate protection law needs to provide the basis for it. If Europe and Germany lead the way on climate change and the introduction of mitigation techniques, others - already competitive reasons - follow.
 2 The energy transition must be actively pursued, both as a "green" energy production, as well as energy saving turnaround. Through innovations in energy efficiency and a focus on energy savings in companies and households can manage the transformation of energy at reasonable costs for all involved. With the great energy transition opportunities are economically connected, not only for our country but also for Europe and for the world. Today's generation has a duty to provide a safe power base for future generations.
 3 We demand our right to a participation and voice. Citizens want to actively participate in decision-making in politics, economy and society. If politicians do not want to jeopardize democracy, they must justify and convey what they are doing and why. We call on our leaders to leave their ivory towers to seek sincere discourse with citizens and make decisions on this basis. The voters need to know what they can choose and rely on politicians.
 4 We urge the government to reform government finances so that the debt reduced and new priorities for a future just and sustainable output design can be set. The interest burden on the state budget must be reduced and sustainable future investments encouraged. Only a financially stable state can ensure security, education, culture, research and development, social security and other public goods to all citizens.
 5 We call for a reform and strict regulation of private finance. Banks are servants of the economy and the citizens, not their rulers. "Systemically important" banks take an entire society hostage. Therefore, the limitation of bank power is indispensable. The polluter pays principle must also enter in the financial sector to bear: the consequential costs of financial crises must bear those who earn high profits with incalculable risks. As a bank customer, we call for full transparency in the use of entrusted funds and crisis-proof variety of banks.
 6 We demand social justice in Germany . Poverty and lack of opportunities must be overcome. A crash programme is needed o stop the growing rift between rich and poor. Participation in private prosperity and public goods must be secured and strengthened social cohesion. An effective minimum wage would be an essential bulwark against the social crash. High earners and the wealthy must contribute more to the financing of public tasks. 

7 We demand a serious effort to fight hunger, poverty and underdevelopment in the world. need for this is an emergency package of measures to implement the Millennium Development Goals. Multinational companies must be required by law to protect the social and human rights of workers in their factories and suppliers, and to contribute to a survivable level to raise their living standards.
 8 We call for a sustainable development of our economy, fair competition rules and the reduction of environmentally harmful subsidies. With the sustainable transformation of our economic system, great opportunities for Germany are possible because environmentally friendly technologies and products will be a competitive advantage and export in the future.
 9 We call for a comprehensive nationwide reform of the education and training system, because education is the most effective, most social and economical way of securing the future of our society and the fuel . It is a prerequisite for participation in society and creates the potential for innovation in our country. All young people need regardless of their parents' income equal access and opportunities for advancement in the education system. Curricula, teaching methods and grading systems of the past must be checked and designed so that the desire to learn, commitment and talents of young people are supported in their diversity and their self-confidence is strengthened. School must be a place of enthusiasm, the strengthening of self-awareness, the development of individual potentials and prepare them for the challenges of the future.
 10. We demand a new fair contract between generations. If our children are to have at least the chance of a life as it was our generation, we must stop the destruction of natural resources and the exclusion of talents and cultural diversity of people . We need new visions and debates about the future of the good life. We want to give our children a society that allows them and enables them to realize their dreams. Because our children especially in times of demographic change are entitled to a promising life.

We call a strategy of change for Germany, Europe and the world . Sustainability requires more than a few cosmetic changes. And she needs to close ranks with the emerging and developing countries that have a special meaning for all sustainability issues due to their dynamic development. We must with a long breath and consistently work towards an ecologically and socially just society. We call on all politicians to make decisions in their choice not dependent on short-term forecasts, power shifts or lobby interests. 

Although there seem to have been a generally favourable reaction, I sense a lack of excitement - something very cerebral..... contrasting with the intensity which has been characteristic of German discussion of social issues in recent times.
And it would be interesting to compare and contrast it with the UK Power Inquiry of 2004 which was a powerful diagnosis of the ills of British democracy........but which sank like a stone after the 2010 elections.....My own take on its analysis is here...Interesting that Europe simply doesn't figure in the German manifesto!

June 17 1953 - Electing another people!

Sixty years ago today, East German workers rose against their government - an event which is being marked extensively in the German media. 

The uprising (quickly put down) is nowadays best known for a short poem written by Bert Brecht at the time - which was not however published until 1959 after his death in 1956. 

Die Lösung	The Solution
Nach dem Aufstand des 17. Juni Ließ der Sekretär des Schriftstellerverbands In der Stalinallee Flugblätter verteilen Auf denen zu lesen war, daß das Volk Das Vertrauen der Regierung verscherzt habe Und es nur durch verdoppelte Arbeit zurückerobern könne. Wäre es da Nicht doch einfacher, die Regierung Löste das Volk auf und Wählte ein anderes?	After the uprising of the 17th of June The Secretary of the Writers’ Union Had leaflets distributed in the Stalinallee Stating that the people Had forfeited the confidence of the government And could win it back only By redoubled efforts. Would it not be easier In that case for the government To dissolve the people And elect another?

Although I am a great admirer of Brecht's poetry, I readily admit he was not the most admirable of human beings...

Greek freedoms

The events around Taksim square in Istanbul rather drove the Greek government’s sudden and inconceivable closure of the state media (ERT) last week off most front pages. Journalists are not everyone’s favourite group of people; and it may well be true (as the Greek PM said) that there was a lot of slacking and underemployment in the state radio and television studios.But that is no justification for the sudden closure – Europe’s first in the post-war period. Yanis Vroufakis, the Greek economist who wrote The Global Minotaur, is hardly an admirer of the state broadcaster which actually banned him for more than 2 years from appearing on its channels - but he chose to spend 3 nights with the journalists who are, with quite a bit of public support, resisting the closure. His reasoning is a powerful comment on the current state of our freedoms..... 

As probably the only Greek commentator to have been blacklisted by ERT over the past two years (due to the previous government’s annoyance at my insistence that Greece was bankrupt and should default in 2010, instead of adding huge new loans to un-payable debts) I feel I have the moral authority to cry out against ERT’s passing. Despite ERT’s many ills, its sudden, authoritarian closure by our troika-led government is a crime against public media that all civilised people, the world over, should rise up against.
Why? Because however stale, inefficient, even corrupt our public media organisations may be, they are essential to a well functioning society. In our stratified societies the legal system, for instance, is arguably unfair toward the weaker members of society who cannot afford the top lawyers or who are inarticulate. Even in the most civilised society, courts offer us nothing more than a chance of justice. There are no guarantees of it. Similarly with our public education systems. Frequently, they serve the interests of the middle class better than those who truly need public education. Nevertheless, this is no reason to close down the courts or our public schools.
Similarly with public television and radio: they offer us no guarantee of current and affairs pluralism and cultural diversity. What they offer us is merely a chance of it. A chance for an electronic public space where values are irreducible to prices and voices can be heard that annoy our society’s high and mighty.

A good - and lovely - man

Another good man has died – the Scottish writer Iain Banks - at age 59. A computer scan revealed he had inoperable cancer – and he died 3 months later while at the crest of his craft and zest for life. You can get a good sense of both his writing and what he stood for in the last interview he did before his tragically early death 

As we chat, he frequently loops off into hilarious denunciations. "I can understand that people want to feel special and important and so on, but that self-obsession seems a bit pathetic somehow. Not being able to accept that you're just this collection of cells, intelligent to whatever degree, capable of feeling emotion to whatever degree, for a limited amount of time and so on, on this tiny little rock orbiting this not particularly important sun in one of just 400m galaxies, and whatever other levels of reality there might be via something like brain-theory [of multiple dimensions] … really, it's not about you. It's what religion does with this drive for acknowledgement of self-importance that really gets up my nose. 'Yeah, yeah, your individual consciousness is so important to the universe that it must be preserved at all costs' – oh, please. Do try to get a grip of something other than your self-obsession. How Californian. The idea that at all costs, no matter what, it always has to be all about you. Well, I think not."
His political zeal burns equally ardently. He confesses that "for half a second", as he and Adele travelled across the Alps from Venice to Paris on honeymoon, he was "elated" when he heard that Thatcher had died. "Then I realised I was celebrating the death of a human being, no matter how vile she was. And there was nothing symbolic about her death, because her baleful influence on British politics remains undiminished. Squeeze practically any Tory, any Blairite and any Lib Dem of the Orange Book persuasion, and it's the same poisonous Thatcherite pus that comes oozing out of all of them.
In the unlikely event that I'm around for the referendum on Scottish independence I'm definitely voting 'yes'. I was saying last year that if we don't get it in 2014 we'll get it in my lifetime and now it turns out my lifetime might not extend as far as the first referendum and that just seems wrong – a Scotland still shackled to a rightwing England, especially with the rise of the bizarrely named Ukip (I think they'll find their acronym should be EIP actually) – I won't be sorry to be missing that. I won't miss waiting for the next financial disaster because we haven't dealt with the underlying causes of the last one. Nor will I be disappointed not to experience the results of the proto-fascism that's rearing its grisly head right now. It's the utter idiocy, the sheer wrong-headedness of the response that beggars belief. I mean, your society's broken, so who should we blame? Should we blame the rich, powerful people who caused it? No let's blame the people with no power and no money and these immigrants who don't even have the vote, yeah it must be their fucking fault. So I might escape having to witness even greater catastrophe.

Attracting fans is not difficult in this age of personalities - what is much more difficult for artists is to retain a strong sense of decency and principles. I read only a few of Banks's books but was impressed more by what I knew of the man and the courage of his convictions.

German reading

German newspaper stands offer a profusion of titles – with the various regional titles reflecting perspectives not available in centralised England and France. The (weekly) Die Zeit is the country’s most weighty publication – in more senses than one (!). I had enjoyed last month the glimpse one of its articles had given us of ex-Chancellor Helmut Schmidt’s long love affair with painting - not least those of the German Expressionists. Schmidt is now a still active 94 year-old whose trademark cigarette was on display in a recent television interview here. He was not only German Chancellor 1974-82 but also publisher of the Hamburg-based paper for a couple of decades after he left the Chancellory. And I am now reading with interest the account of this rich life of his – Unser Schmidt written by Theo Sommer.

He will doubtless be reading with his usual critical eye the latest fat issue of Die Zeit whose special magazine today focuses on questions such as What is the good life?

From the profusion of titles, I’ve developed a taste for the much thinner and leftist daily - Die Tageszeitung whose sentence construction is less convoluted than the heavies such as Der Spiegel which I have now deserted for the easier Stern. Although Bavaria is a stronghold of the right, Die Suddeutsche Zeitung is an attractively packaged  left-leaning daily with interesting content. Franfurte Allgemeine Zeitung is a rather boring conservative paper - and the Cologne titles are very superficial.

Der Spiegel's English edition continues to be part of my daily reading - its latest offers first a take on some of the construction scandals which are filling the columns of German papers; then a rare insight into war-time Berlin -

The diary of Brigitte Eicke, a Berlin teenager in World War II, is an account of cinema visits, first kisses, hairdos and dressmaking, along with a brief, untroubled reference to disappearing Jews. Recently published, it highlights the public indifference that paved the road to Auschwitz.
Hers is a perspective seldom glimpsed in Germany's World War II literature, a field in which the female voice took a while to be heard.
"In the 1950s and '60s, the focus was more on memories of battle and the male experience," says Arnulf Scriba, who coordinates a project at the German Historical Museum called "Collective Memory," an archive of personal testimonies. "The school had been bombed when we arrived this morning. Waltraud, Melitta and I went back to Gisela's and danced to gramophone records." (1 Feb 1944)
Young girls are made of stern stuff. In December 1942, while Allied bombs rained on Berlin and Nazi troops fought for control of Stalingrad, 15-year-old Brigitte Eicke began keeping a diary. For the next three years, the young office apprentice wrote in it every single day.
Now published in German as "Backfisch im Bombenkrieg" -- backfisch being an old-fashioned term for a girl on the cusp of womanhood -- it adds a new perspective to Germany's World War II experience and shows not only how mundane war can become but also how the majority of Germans were able to turn a blind eye to Nazi brutality.
Until relatively recently, accounts of Germans' own wartime suffering were considered something of a taboo, their own trauma eclipsed by the horror of the Holocaust. But now that the wartime generation is dying, every slice of first-hand social history has inherent value.

Another story focuses on the German Constitutional Court's current consideration of the legality of  the ECB bond buying program known as Outright Monetary Transactions (OMT). 

The program, announced last autumn, envisions the ECB buying unlimited quantities of sovereign bonds from ailing euro-zone member states to hold down their borrowing costs. To date, the ECB has not made any bond purchases, but the mere announcement that it might has proven enough to calm the markets and provide European leaders with some to seek agreement on longer-term measures to solve the crisis.
Even opponents of the program have acknowledged its success. The OMT "has been the most successful measure taken in saving the euro thus far," says Dietrich Murswiek, who represents co-claimant Peter Gauweiler, a member of parliament with Bavaria's Christian Social Union.
But despite its success, the OMT program is illegal, say the plaintiffs. "State financing, whether direct or indirect, is not allowed for the ECB," says one of their attorneys, Karl Albrecht Schachtschneider. And his complaint is far from fanciful -- it is difficult not to see the OMT program as state financing. In essence, the court is being asked to decide whether economic pragmatism trumps a strict interpretation of the law.

Open Europe has a blog on the issue

The painting is one of Hans Purrmann's - a glorious colourist I have just come across who was strongly influenced by Matisse - and whose paintings were banned by the Nazis.

Saturday in Junkersdorf

The world could not have been more beautiful yesterday at the Rhein Energie Stadion and the Junkersdorf woods. The area is huge and intensively used by Koln people at weekends whether for ball games, cycling, festivals - or simply walking around its picturesque small lakes. 

A Sporting High school is also located in a superb wooded area. 

Yesterday an ecumenical group was singing its heart out in the stadium; a family athletics fair was in full swing in a nearby racing track; and a large number of young men and women were taking part in the finals of the German Touch Rugby competition in the complex of football fields. 

First time I've seen this game – the friendly spirit evident was very impressive – as was the sheer mix of shapes and sizes of those taking part.
Germany at its most civilised!

German Europe??

Ulrich Beck is a German sociologist whose name I encounter from time to time – from his work on risk society (which I don’t pretend to understand). He has now jumped to almost best-selling status in the UK by virtue of his small book with the fairly self-explanatory title of "German Europe"

It appeared in English in April and has got the English chattering classes drooling covering, as it does, two of the hate subjects of the English – Europe and the Germans.

The book itself seems a bit incoherent – a bit of knock-about fun at Angela Merkel's expense; an emphasis on her (and Germany's) Protestant/Lutheran discipline (rather missing the point about the Catholic contribution to the concept of the social market); some obvious assertions about the new divisions in Europe; and then some wishy-washy points about the future....... 

You can make up your own mind from this interview, podcast; and summary

I would say that the first thing we have to think about is what the purpose of the European Union actually is. Is there any purpose? Why Europe and not the whole world? Why not do it alone in Germany, or the UK, or France?
I think there are four answers in this respect. First, the European Union is about enemies becoming neighbours. In the context of European history this actually constitutes something of a miracle. The second purpose of the European Union is that it can prevent countries from being lost in world politics. A post-European Britain, or a post-European Germany, is a lost Britain, and a lost Germany. Europe is part of what makes these countries important from a global perspective.

The third point is that we should not only think about a new Europe, we also have to think about how the European nations have to change. They are part of the process and I would say that Europe is about redefining the national interest in a European way. Europe is not an obstacle to national sovereignty; it is the necessary means to improve national sovereignty. Nationalism is now the enemy of the nation because only through the European Union can these countries have genuine sovereignty.

The fourth point is that European modernity, which has been distributed all over the world, is a suicidal project. It’s producing all kinds of basic problems, such as climate change and the financial crisis. It’s a bit like if a car company created a car without any brakes and it started to cause accidents: the company would take these cars back to redesign them and that’s exactly what Europe should do with modernity. Reinventing modernity could be a specific purpose for Europe.

Taken together these four points form what you could say is a grand narrative of Europe, but one basic issue is missing in the whole design. So far we’ve thought about things like institutions, law, and economics, but we haven’t asked what the European Union means for individuals.

What do individuals gain from the European project?

First of all I would say that, particularly in terms of the younger generation, more Europe is producing more freedom. It’s not only about the free movement of people across Europe; it’s also about opening up your own perspective and living in a space which is essentially grounded on law.

Second, European workers, but also students as well, are now confronted with the kind of existential uncertainty which needs an answer. Half of the best educated generation in Spanish and Greek history lack any future prospects. So what we need is a vision for a social Europe in the sense that the individual can see that there is not necessarily social security, but that there is less uncertainty. Finally we need to redefine democracy from the bottom up. We need to ask how an individual can become engaged with the European project. In that respect I have made a manifesto, along with Daniel Cohn-Bendit, called “We Are Europe”, arguing that we need a free year for everyone to do a project in another country with other Europeans in order to start a European civil society.

The Council of Europe published recently a series of lectures by various intellectuals on the crisis and Beck's Europe at risk - a cosmopolitan perspective gives a good sense of his book - and his other contributions. Self-indulgent academic sloganising which comes from too much time in incestuous discussions.
Earlier in March, the Guardian had given us a typical piece of shallow British prejudice in their coverage of the same topic - giving us Beck and a German comedian (resident in the UK). Almost 500 respondents took part in the subsequent discussion thread - which confirmed just how little Brits seem to know about Germany

The curious behaviour of German banks

I mentioned the state-owned regional banks as one of the lynchpins of the post-war German success story – their support of the essentially family-owned industrial companies endowing its society with a long-term perspective difficult for Anglo-Americans to understand. In any other society, such a combination of finance and politics would make for collusive corruption of the highest degree - as is shown in the behaviour of the Spanish Cajas.
The consensual nature of corporate decision-making - as embodied in the Mitbestimmung system of worker representation and involvement has also been a key feature of the post-war German model. But. as Perry Anderson showed in his 2009 article on The New Germany 

the landscape of the Berlin Republic has become steadily more polarized in the past decade or so. At the top, traditional restraints on the accumulation and display of wealth were cast to the winds, as capital markets were prised loose and Anglo-American norms of executive pay increasingly accepted by German business.
Gerhard Schröder gave his own enrichissez-vous blessing to the process in the first half of the 2000s, slashing corporation and upper-bracket income tax, and rejecting any wealth tax,. Structurally still more important, by abolishing capital gains tax on the sale of cross-holdings, his government encouraged the dissolution of the long-term investments by banks in companies, and reciprocal stakes in firms, traditionally central to German corporatism—or in the consecrated phrase, the ‘Rhenish’ model of capitalism. In its place, shareholder value was increasingly set free. By 2006, foreigners had acquired an average of over 50 per cent of the free float of German blue-chip companies

I haven’t so far picked up any analysis on the internet about exactly how this has changed the German “social market”. On the face of it a lot of the basic features are still there – although the scale of the German banks’ exposure to the sub-prime market disaster did take us all by surprise. Michael Lewis got himself into some trouble a couple of years ago with his Vanity Fair article on Germany which focused a bit too much on anal vocabulary – but his article did contain some important vignettes -

He is a type familiar in Germany but absolutely freakish in Greece—or for that matter the United States: a keenly intelligent, highly ambitious civil servant who has no other desire but to serve his country. His sparkling curriculum vitae is missing a line that would be found on the résumés of men in his position most anywhere else in the world—the line where he leaves government service for Goldman Sachs to cash out. When I asked another prominent German civil servant why he hadn’t taken time out of public service to make his fortune working for some bank, the way every American civil servant who is anywhere near finance seems to want to do, his expression changed to alarm. “But I could never do this,” he said. “It would be disloyal!”

The curious thing about the eruption of cheap and indiscriminate lending of money during the past decade was the different effects it had from country to country. Every developed country was subjected to more or less the same temptation, but no two countries responded in precisely the same way. The rest of Europe, in effect, used Germany’s credit rating to indulge its material desires. They borrowed as cheaply as Germans could to buy stuff they couldn’t afford. Given the chance to take something for nothing, the German people alone simply ignored the offer. “There was no credit boom in Germany. Real-estate prices were completely flat. There was no borrowing for consumption. Because this behaviour is rather alien to Germans. Germans save whenever possible. This is deeply in German genes. Perhaps a leftover of the collective memory of the Great Depression and the hyperinflation of the 1920s.” The German government was equally prudent because, he went on, “there is a consensus among the different parties about this: if you’re not adhering to fiscal responsibility, you have no chance in elections, because the people are that way.”
In that moment of temptation, Germany became something like a mirror image of Iceland and Ireland and Greece and, for that matter, the United States. Other countries used foreign money to fuel various forms of insanity. The Germans, through their bankers, used their own money to enable foreigners to behave insanely.

This is what makes the German case so peculiar. If they had been merely the only big, developed nation with decent financial morals, they would present one sort of picture, of simple rectitude. But they had done something far more peculiar: during the boom German bankers had gone out of their way to get dirty. They lent money to American subprime borrowers, to Irish real-estate barons, to Icelandic banking tycoons to do things that no German would ever do. The German losses are still being toted up, but at last count they stand at $21 billion in the Icelandic banks, $100 billion in Irish banks, $60 billion in various U.S. subprime-backed bonds, and some yet-to-be-determined amount in Greek bonds. The only financial disaster in the last decade German bankers appear to have missed was investing with Bernie Madoff.

A German economist named Henrik Enderlein, who teaches at the Hertie School of Governance, in Berlin, has described the radical change that occurred in German banks beginning about 2003. In a paper in progress, Enderlein points out that “many observers initially believed German banks would be relatively less exposed to the crisis. The contrary turned out to be the case. German banks ended up being among the most severely affected in continental Europe and this despite relatively favorable economic conditions.” Everyone thought that German bankers were more conservative, and more isolated from the outside world, than, say, the French. And it wasn’t true. “There had never been any innovation in German banking,” says Enderlein. “You gave money to some company, and the company paid you back. They went [virtually overnight] from this to being American. And they weren’t any good at it.”
What Germans did with money between 2003 and 2008 would never have been possible within Germany, as there was no one to take the other side of the many deals they did which made no sense. They lost massive sums, in everything they touched. Indeed, one view of the European debt crisis—the Greek street view—is that it is an elaborate attempt by the German government on behalf of its banks to get their money back without calling attention to what they are up to. The German government gives money to the European Union rescue fund so that it can give money to the Irish government so that the Irish government can give money to Irish banks so the Irish banks can repay their loans to the German banks. “They are playing billiards,” says Enderlein. “The easier way to do it would be to give German money to the German banks and let the Irish banks fail.” Why they don’t simply do this is a question worth trying to answer.
…..On the surface IKB’s German bond traders resembled the reckless traders who made similarly stupid bets for Citigroup and Morgan Stanley. Beneath it they were playing an entirely different game. The American bond traders may have sunk their firms by turning a blind eye to the risks in the subprime-bond market, but they made a fortune for themselves in the bargain and have for the most part never been called to account. They were paid to put their firms in jeopardy, and so it is hard to know whether they did it intentionally or not. The German bond traders, on the other hand, had been paid roughly $100,000 a year, with, at most, another $50,000 bonus. In general, German bankers were paid peanuts to run the risk that sank their banks—which suggests they really didn’t know what they were doing. But—and here is the strange thing—unlike their American counterparts, they are being treated by the German public as crooks. The former C.E.O. of IKB, Stefan Ortseifen, received a 10-month suspended sentence and has been asked by the bank to return his salary: eight hundred and five thousand euros.