Another Mogul is leaving the Euro-cause

Today the leader of the Eurogroup Jean-Claude Juncker (also prime minister of Luxembourg) resigned - unexpectedly and before the end of its term in June. The formal reason of the resignation is his discontent of German-French domination in Euro decision making. But I think this resignation means much more. I think the Euro is close to its end and the weighty officials are leaving the cause, this way saving their own authority.

It is good to remember that the former boss of Bundesbank and a leading candidate for ECB-Chairman Axel Weber suddenly resigned and went to a new job in Switzerland. This way Germany de facto decided not to have the most important position in Euro-zone - the Head of the ECB. Months later the German member of ECB board Jurgen Stark also resigned inflicting a plunge on markets.

After these 2 resignations it became suspicious what exactly Germany is doing and will Germany stay in Euro-zone.

And now we see another important Euro-official abandoning the EU-currency cause. The arguments of resignation sound strange and unconvincingly as it is clear enough that Germany and France carry the main responsibility in Euro-zone so it is normal exactly for them to hold the dominating influence. They are the biggest economies and they pay most of the money in salvation funds.

Juncker has always known this and never protested. In fact he even worked for establishing this domination. And now suddenly - resigned...

I think he is just the next to leave the sinking ship. It is very interesting what will happen now. The candidate with highest chance to replace Juncker is the German finance minister Wolfgang Schaeuble. Juncker himself said Schaeuble is competent enough and he will support his nomination. So with his resignation and with this support Juncker is moving the Eurogroup in hands of Germany. So it will be very interesting what exactly Germany will do. If they accept the position this will mean that Germany is strongly connected with the Euro. It would be funny to leave Euro and get back the Deutsche Mark at a moment when a German is Heading the Euro. Mr Schaeuble would fall in a twofold position to re-implement the Mark as finance minister and represent the Euro as boss of Eurozone.

So if Germany decides to take this position therefore it will back the Euro till the end of world.

But if this is the German choice then why they missed the much more important position of ECB-Chairman and left it to Italians? And why Mr Stark also resigned?

There is no logic in such type of distancing Germany from Euro and accepting the position of Eurozone Head.

So very soon we will see another Germany move that will make more clear its plans. If the new Head of Eurozone is not Schaeuble, and another leader (from smaller country) is elected, therefore Germany is close to leaving the Euro. If anyway Schaeuble becomes the Head of Eurozone then may be this will mean that Germany is still confused, does not know what is best for it and is issuing controversial signals, after losing some posts and taking other ones.

I don't believe this second will happen. My forecast is that Germany will find an excuse not to take this position, and it will be given to a minister of a smaller country. I think Euro is at countdown situation and the final is closing faster and faster...

Dobri
May 1st 2012

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