Here’s a story you might not have heard… In some areas of Germany, you can once again use Deutsche Marks as legal tender:
Who Needs the Euro When You Can Pay With Deutsche Marks?
Shopping for pain reliever here on a recent sunny morning, Ulrike Berger giddily counted her coins and approached the pharmacy counter. She had just enough to make the purchase: 31.09 deutsche marks.
“They just feel nice to hold again,” the 55-year-old preschool teacher marveled, cupping the grubby coins fished from the crevices of her castaway living room sofa. “And they’re still worth something.”
Behind the counter of Rolf-Dieter Schaetzle’s pharmacy in this southern German village lay a tray full of deutsche mark notes and coins—a month’s worth of sales.
Germans have yet to give up on the euro. But as Europe’s debt crisis rages on, many are indulging their nostalgia for the abandoned mark by shopping with it again—and retailers are happily going along.
As defunct currencies go, “die gute alte D-mark,” or “the good old D-mark,” as it is still affectionately called, is far from dead. Germans officially traded in the currency for euro bills and coins on Jan. 1, 2002, and the mark immediately ceased to be legal tender. But 13.2 billion marks—worth €6.75 billion ($8.3 billion)—remain tucked in mattresses, old prayer books, coat pockets or otherwise in circulation, according to the Bundesbank, more lucre than the euro bloc’s 16 other ex-currencies combined.
My question to investors today is…why would Germany start allowing Deutsche Marks to be used again? Moreover, if Spain and Greece are on the brink, why has Germany refused to increase the funding of the EFSF and ESM bailout funds AND tied up its ratification of the ESM in legal proceedings that won’t even begin until September?
The answer is simple: Germany knows that the game is up. Its best bet is to put off the implementation of various bailout funds (for legal reasons) while looking as though it wants to help… and let the EU crash and burn around it.
Consider the following stories:
Top German court to announce ESM ruling Sept. 12
Germany’s Federal Constitutional Court will announce a decision on lawsuits challenging the country’s participation in the permanent euro-zone rescue fund, the European Stability Mechanism, and the fiscal pact on Sept. 12, the court said Monday in a statement on its website. The court held a public hearing earlier this month to examine complaints that participation in the fund and the fiscal pact violated German law by taking some authority over the national budget away from parliament.
German court dumps election law that favored Merkel
Indeed, if we read between the lines of the political proceedings coming out of Germany
Germany’s top court ruled on Wednesday that the country’s election law is unconstitutional, leaving Europe’s biggest economy with no valid rules on how to distribute seats in the Bundestag lower house just over a year before the next vote.
The Karlsruhe-based Constitutional Court upheld a case brought by the opposition Social Democrats (SPD), the Greens and more than over 3,000 citizens against the law, which was altered by Chancellor Angela Merkel’s center-right coalition last year.
Germany’s complex system, which can end up creating extra or “overhang” parliamentary seats that benefit the bigger parties, breaches citizens’ rights to take part in direct, free and equal elections as enshrined in the constitution, the court said.
Merkel’s government, preoccupied with trying to stem the euro zone debt crisis, now has to come up with a new law by autumn 2013, when the next federal election is due.
Europe is imploding and Spain is so desperate for cash that its Finance Minster flew to Germany to meet in private with German officials, begging for €300 billion… and Germany won’t vote to even ratify the ESM, let alone raise capital for it until September 12!?!?
On top of this, Germany suddenly decided that its election process is unconstitutional and needs to be revised? Why now? Aren’t there more pressing issues such as the implosion of the European banking system? (remember, Germany has already created a firewall around its own banks… read the former issue titled, Germany: The Smoking Gun)
To me the message is clear, Germany is going to do all it can to appear ready to help, but it will forestall any actual helping, especially if it involves increasing Germany’s exposure to the PIIGS (note: Merkel stated that there would never be Euro-bonds for as long as she lived).
This is not political posturing. Germany has already brought its own solvency into question (see the Moody’s warning) by propping up the EU. Angela Merkel is not going to lose Germany’s AAA status the year before she’s up for re-election.
So don’t count on Germany to come to save the day. Look at the country’s actions, not what its leaders are saying. The writing is clear here.
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