GCC: the next chapter of the EU Soap Opera.

Draghi made his decision to buy up Spanish, Italian, Greek and whatever bonds that the ECB can "buy" by printing money. This would save the Euro, reduce bond rates and buoy the world stock markets. So, what is this about a new chapter?

The next chapter in this soap opera is the ruling of the German Constitutional Court. The Court is to announce its findings Wednesday. The question on which the Court is to rule: Is it permitted for Germany to contribute to the European Financial Stability Mechanism fund, EFSM for short.

We are talking about two separate things here: 1. the European Central Bank printing money to buy up bonds and 2. Germany to contribute to the EFSM so a total of about 1 trillion can be dispensed. The ECB's decision does not depend on the German Court. Can the EFSM be established without German participation? In a short word, NO. Would these two decisions interact? Definitely. Without the EFSM, the EU can still survive, but the ECB would have to print more money.

Why are the Germans leery of this whole procedure? First, because they regard the problem of the bailing out of Europe as a lost cause and second, because they are afraid of hyperinflation. The Germans are more efficient, more disciplined. Heck, they almost made Marxist Socialism (misnamed as Communism) work while no one else could. And they do not want to contribute to people whom they regard as undisciplined, inefficient and lazy.

Here is a picture of the German Court in its special regalia: