Nordkapp: “Stubborn Germany is destroying its own project”

The financial City in Spain is growing more vocal day after day. Here’s a note from Nordkapp Inversiones, one of the harshest voices we could hear on Thursday criticising Germany’s block action against European Central Bank support to stop dangerous rises of yields on Italy’s and Spain’s sovereign debts.

Nordkapp’s analysts speak of an unavoidable modification of the European Monetary Union membership list, either because the weakest link leaves or because the strongest one does:

“Sooner than later, we will see Greece out of the euro zone or, if this doesn’t happen, it will be Germany. To prevent this situation, the only recourse would be issuing money, but in order to get the necessary volume to ease the crisis Germany would first prefer to abandon the common currency. The German authorities might accept a short issuance, which would be inefficient enough not to solve the troubles the euro is in. Thus, the euro zone is bound to experience dramatic changes.”

At Norkapp, they think Greece’s exit would force Italy, Ireland and Portugal leaving the euro, too, due to market pressures. That would depreciate the euro, as much as a BCE intervention would do.

“In any case, the euro has only one direction ahead, and it is downwards. Euro’s fall has somehow been contained so far, but it will accelerate from now on.

“A stubborn Germany prevents the ECB taking the measures that could put the crisis under control. Germany has become the worst enemy of the euro, indeed. Right now, it would be better if a country with more knowledge in finance were in charge of the European Union. Germany is inflicting severe harm to a project it helped so much to create.”