Eurogroup president swallows statement on savings confiscation

Jeroen Dijsselbloem, President of the Eurogroup, 25-3-2013. (Eurozone Portal photographic library).

Jeroen Dijsselbloem, President of the Eurogroup, 25-3-2013. (Eurozone Portal photographic library).

Even if last weekend’s negotiations over the Cyprus problem were so demanding and exhausting for Jeroen Dijsselbloem, the Dutch minister of Finance and President of Eurogroup is not excused for having said that the solution agreed for Cyprus will be from now on the standard arrangement for any future financial bailout or rather bail-in in Eurozone. The confiscation of deposits cannot be a standard procedure nowhere in the world.

This was either a terrible fault on his part or a major attempt by him to downgrade single-handed all the weaker Eurozone member states’ banking groups. It was his first major test as Eurogroup President and he failed gloriously. For one thing he should have remembered that the latest straight bank failure was a Dutch affair and he had to deal with it himself, when the banking and insurance group SNS Reaal NV of his country went bankrupt at the beginning of February. He also forgot to say that The Hague spent €4bn of Dutch taxpayers’ money to safeguard all deposits in this bank.

In view of that it is possible that Dijsselbloem attempted to draw the lights of publicity away from his country’s grave banking problems and the Dutch consumers’ over indebtedness, by focusing on South Europe’s financial shortcomings. In either case he is incompetent and utterly dangerous for the Eurozone as one entity. In any case he doesn’t think in European terms as his very successful predecessor Jean-Claude Junker did. Unless this Dutch politician is indirectly announcing the end of Eurozone and the advent of some kind of Hanseatic Union, in which his country will be producing the potatoes to be consumed in the Germanic industrial towns and cities along the flow of river Rhine.

Later on Tuesday, Dijsselbloem tried to revoke what he said about the bail-in and the confiscation of bank deposits becoming a standard Eurozone practice. This was after his statement provoked a tsunami of reactions from EU governments and the European Central Bank. It took him two years to become President of the Eurogroup under the guidance of Junker, but now it seems that three weeks were enough to completely consume him in this position. He must leave without delay, unless Berlin has assigned him to carry out the dirty job for Germany that is to try to make the Teutonic banks as the only safe haven in Eurozone.

Incidentally only if all the Eurozone savings, estimated at €17 trillion were to be deposited in German banks, those lenders would have a chance to avoid bankruptcy in the near future. They have been accumulating toxic assets during the last ten years and they still keep on the same track. What the German banks got from ECB two years ago, when the central bank exchanged some of their toxic assets with real money to the tune of anything around €350bn, cannot be repeated again. Nikolas Sarkozy is now under criminal prosecution in France, and not for trivial reason.

Seemingly Berlin plays its last card with this heir of Van Gogh’s Potato eaters. However in view of the reactions the Dutch President of Eurogroup issued today an announcement as follows: “Cyprus is a specific case with exceptional challenges which required the bail-in measures we have agreed upon yesterday. Macro-economic adjustment programmes are tailor-made to the situation of the country concerned and no models or templates are used”.

Many Europeans hope now that this could be the last statement issued by this Dutch potato eater, in his capacity as Eurogroup President. It’s a haunt for the all socialist parties of Europe to know that this Dutch minister of Finance calls himself a socialist.

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