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Thursday, 30 June 2011

Why is Italy into trouble anyway? And will it come out?

This last week, when the story on the Greek austerity vote was unfolding on Twitter, some experts who I highly respect, were also talking about the growing default risk for Italy.

Although I couldn’t imagine that a so strong and powerful country like Italy could default, this message was for me a trigger to investigate it anyway.

Italy is the most prominent and economically powerful member of the group of countries, called the PIIGS and a long-term member of the G8. But the country is going through a tough time currently. And that could be a very dangerous development for the Euro-zone.

When the results of a Greek default would be substantial (although there is no common opinion on the magnitude of such an event), friend or foe will not deny that an Italian default would be like an economic hydrogen bomb, thrown on the euro-zone. While you can argue if such an event would be the end of the Euro as we know it, it is certain that it would be impossible for the other Euro-zone countries to pony up sufficient financial aid to rescue Italy.

The country is just too big for this kind of rescue action: Italy, with its GDP of €1.437 trn ($2.055 trn) in 2010, is still ranked number 8 in the world of strongest industrial countries. But the country took a severe blow from the aftermath of the credit crisis in 2008, as it is a large producer of luxury goods, like expensive furniture, fashion, luxury accessories and automobiles.

First let us look at some key figures and details on Italy (all key figures are courtesy of the European bureau of statistics Eurostat and the CIA World Factbook data):

·         The estimated GDP over 2011 is €1.424 trn ($2.037 tln), compared to €1.618 ($2.314 tln) in 2009. A drop in GDP of almost 12% in two years.

·         National debt is a staggering 118,1% of GDP in 2010 = € 1.697 trn ($2.426 trn)

·         Although the unemployment is relatively low with 8.2% in average in 2011, the youth unemployment was 26.2% in april of this year. This can be considered very high and it forms a hazard for the not-too-distant future, as these youngsters will lack working experience when the labour market makes a turnaround.

·         Although the GDP per capita is not very high, compared to most West-European countries (see the following table), the 60.6 mln inhabitants make that the GDP of Italy is still one of the highest in the world (rank 8):

GDP per Capita
The Netherlands
United Kingdom

·         Surprising to me was that the difference in GDP per capita between the six poorest and six wealthiest regions of Italy is not extreme (see following) table, compared to the same West-European countries. In Germany and especially the UK, those differences are bigger.

Average GDP of the 6 Wealthiest Regions

Average GDP of the 6 Poorest Regions

Difference as a percentage
United Kingdom
The Netherlands

In contrary to f.i. Greece, Spain and Portugal, there is no structural imbalance between imports and exports. The country could even be considered a textbook example of balanced imports and exports:

Except for the extreme height of its debt, which is a serious problem and the drop in GDP that is substantial, but not extremely worrisome, the situation for Italy doesn’t look very bad at all. Compared to Spain, Portugal and Greece with their massive trade deficits, their lack of industry, their massive unemployment and massive bubbles on the CRE + RRE market, the situation in Italy looks quite normal.

But there is a ‘but’: the economic growth of Italy over the last decade has already been disappointing with an average 0.6% per annum.

And if you look on the industrial growth, the figures are even more worrisome: The growth of industrial production has been negative in 5 of the last 9 years, with a disappointing -13.5% in 2009 and -2.8% in 2002 and 2008 as negative highlights. Positive industrial growth during this time span has been at maximum +1.5%. And the manufacturing industry is still extremely important for Italy. The country is an industrial giant with large and very strong companies in the following industries:

·         car making
·         chemical industry,
·         dairy and foodstuffs production
·         metal and metal working industry
·         High-end furniture
·         textile, fashion and luxury goods

Although the Chinese market can be a very promising market for the products that are currently manufactured in Italy, it is no surprise that the Chinese manufacturing industry is fierce competition for Italy. This diminishes the chances on serious industrial growth in Italy in the coming decade.

And there is more reason for worries. Italy can roughly be divided in two zones: the highly industrialized and prosperous northern-zone that stretches from the Swiss and Austrian border to the capital Rome and the troublesome southern-zone that stretches from the area south of Rome to Calabria and the islands of Sicily and Sardegna. 

Although the southern zone of Italy, in comparison with the strongest regions of the country, has less arrears than former East-Germany and the poor parts of the UK (see table 2), this part of the country has had a worrisome history over the last 200 years.

The largest problem of the southern part of Italy has been the organized crime that stretches its tentacles all over Italy: the Mafia (Sicily), the Camorra (Naples) and the Ndrangheta (Calabria) are the extremely strong, violent and dangerous representatives of this organized crime. The war against these organizations has been relatively unsuccessful: some battles are won, but in general the war is at an enduring stalemate situation. And don’t be mistaken: Organized crime organizations are multi-billion dollar organizations that would be considered extremely successful, when normal businesses.

The organized crime organizations have not only influence in the underworld, but also in official businesses, industries and in the government, where they gained access via bribery, deception, violent crime and extortion. Dutch company TNT Post Group is one of the recent victims of organized crime in Italy, as local couriers of the company had ties with an organized crime organization.

In general North-Italy is ‘towing’ South-Italy via subsidies, relocation of industries, building projects and other ways of financial/economic aid, but the amount of money that gets in the hands of organized crime from these efforts, is staggering. North-Italians state jokingly: ‘under Rome starts Africa’. This describes their mixed feelings on the southern part of their country.

But in the north not all is well too:

·         the widespread, enormous corruption is spread all over the country and goes from the lowest to the highest levels, all over society.
·         the wobbly political situation with literally dozens of different governments since WWII and with sometimes radical leftwing and rightwing parties in power, worries the other members of the Euro-zone;
·         the enormous influence that long-term President Silvio Berlusconi has in the banking and insurance industry, the media landscape and other parts of business life goes far beyond what is considered ‘desirable’ in a democracy. This and the large number of scandals that this president is connected to, are also troubling the other euro-zone members.

Still, I am optimistic on Italy. The reason for this is the vividness of the country: almost everybody that visited Italy falls in love with it and with the people that live there.

And Italy is an industrial and technological giant that manufactures products that no other country can emulate. There is nothing in this world like a Ferrari,  like Italian luxury furniture or like a Brioni suit. Everybody that owned one of those products, knows this. And with the growing prosperity in the BRIC’s (Brazil, Russia, India and China), the market for Italian products might increase again.

Besides that, the trade balance looks quite healthy and might grow into a small surplus in a few years, when exports increase.

But at short notice, the dangerous debt position, the slow growth of GDP, the remaining difficult situation in the Southern part of the country and the infamous president with his deteriorating authority in the country are reasons to worry on Italy.

And the financial markets smell blood currently, as far as the PIIGS-countries are concerned. That makes a quick solution (a real solution, please) for the Greek, Spanish and Portuguese problems extremely important. 

Wednesday, 29 June 2011

General satisfaction after Greek ‘yes’-vote. The world, however, should not forget that really nothing is solved. This is called a Pyrrhic victory.

Today, June 29th 2011 will be remembered (at least in the coming weeks) as the day of the Greek vote on the austerity measures. A positive result to this vote was vital for receiving a new tranche of financial aid from the Euro-zone countries, the IMF and the ECB
The whole financial and news community was watching eagerly for the result of this vote and now the score is set: 155 of 300 Greek MP’s voted in favor of the austerity measures.
The euro jumped immediately on the news, as if the Greeks and the Euro-zone were saved from financial doom and gloom a la Lehman or even worse. But people should not forget: in my opinion, this is only a Pyrrhic victory for Europe and the Euro-zone. All it bought was time for Greece and the banks to figure out how to move on.
Today an economist on Dutch Business News Radio stated that Greece needed a budget surplus of 5% for the next 30 years to get out of financial trouble. That isn’t going to happen.
So the next tranche of financial aid will be used to roll over some maturing credit and thanks to the special arrangements that will be made by the German and French banks, some extra credit will be rolled over.
But will this vote in favor of the austerity measures:
·    solve Greece’s long-term financial problems?
·    take away something of the unsustainable Greek debt?
·    make Greece less corrupt?
·    increase the tax yields of Greece?
·    cause structural growth in the industrial, agricultural and services sectors of this damaged country?
·    do something for the normal Greek citizens that are more victim than perpetrator in this Greek drama?
Most people will agree with me that all questions can be answered with ‘No’. That is why I call it a Pyrrhic victory.

Tuesday, 28 June 2011

Ten lessons that could be learned from the Sovereign Debt-crisis. Or, how we always prepare for the last crisis to happen again, which it won’t do.

1.  If you start a new supranational currency like the Euro, check the credibility and creditworthiness of your partners.

One of the most obvious things that we learned from the current crisis is: you can’t trust the financial reports, statistics and official statements of countries to be true. These might be subject to political wishful thinking and/or politically-driven, (semi-)fraudulent changes.

It was not in the interest of countries like Greece and Portugal to tell the whole truth on their financial situation. This would have closed the door for these countries to step into the Euro and would have put them further backwards, compared to the north-western European countries. Therefore these countries decided to spice up their financial reports and statistics, in order to get their chance to enter the Euro-zone.

And the funny thing was, that many insiders knew in advance that the reports and statistics of these countries were not correct. However, nobody in power bothered to listen to these people.

If you want to be really certain on the financial situation of a country, you need independent, international auditors that don’t have an interest in spicing up the financial situation of a country. And to prevent these auditors from getting this interest, you should pay them very well and keep an eye on their behaviour outside working hours.

2.  If the strongest countries start with ‘bending the rules’, the weaker countries might start to break them.

A few years ago, when the credit crisis was still a nightmare from ‘a bunch of loonies with a tinfoil hat’, Germany and France broke the demand of the European Stability Pact to let state deficits not exceed the 3% mark.

Instead of being penalized for this, like the rules of the European Stability Pact required, France and Germany told the rest of the Euro bunch ‘to take a hike’. This angered the formerly Dutch Finance Minister Gerrit Zalm (currently CEO of ABN Amro), but it was a lesson learned well for Greece, Ireland, Portugal and the other PIIGS.

And when the credit crisis gained momentum, these countries themselves thought: ‘take a hike’, when the rest of Europe (Germany and France as front-soldiers) was urging them to stick to the rules and to execute the austerity packages that are laid upon them. And did they break the rules!

3.  Stress tests and worst case scenario’s are never useful: either they predict nothing, or they scare the sh*t out of everybody.

We have had stress tests for the American financial markets; and nobody believed them, because they sounded like a walk in the park for banks and insurers. This was caused by the fact that all categories that would have disclosed financial misery, were left out of the test.

We have had stress tests for the European financial markets; and nobody believed them, because they also sounded like a walk in the park for banks and insurers. And after the stress test was hardly over, the ‘healthy’ Irish banks collapsed.

We have had even tougher stress tests for the European financial markets; and nobody believed them, because they still sounded like a walk in the park. Because the scary tests were still left out.

The point is, the only correct stress tests are the ones that scare everyone sh*tless, as they disclose the true financial misery. Executing such a stress test could eventually trigger a bankrun, when the bank or insurer is financially in dire straits. And no politician wants financial misery and bankruns with him on the helm. So stress tests will always be of the bleeding heart, useless kinds.

4.  Accept the unwillingness of politicians to do anything unpopular, that will cost them votes on the next elections.

Through time, there have always been little politicians that had the backbone to take the real hard decisions. That is what also characterizes the politicians during this crisis: running away from decisions, when they count.

And when you ask: what are the hard decisions for politicians? Those are the ones that hit and hurt themselves and their own grass roots: the people that count for their reelection.

The result is that crises like these are prolonged and worsened, as it is easier to submit drugs that masks the true disease, instead of administering the real medicine that initially causes much pain, but opens to road to curing from the disease (thank you, Toddo and Kevin, for the inspiration (

So there might be a QE3 after all, following QE1 and 2. Everybody knows it doesn’t help, but it gives the people the idea that something is happening.

And Greece and Portugal might indeed receive additional financial aid from the EU, at whatever terms and conditions, although it won’t help. And Greek and Portuguese politicians might indeed silently neglect to follow those terms and conditions, as their grass roots can’t handle them, making the point from the financial aid useless from the beginning.

Another example: It is a fact that there are substantial cutbacks in The Netherlands, in order to save €18bln. Especially within the category of people that didn’t vote for the current cabinet. But the decision that would really count, is not taken: getting rid of Mortgage Interest Deduction, although this would immediately save €16 bln per annum. Because that would hit the grass roots of the current cabinet. So that doesn’t happen.

Every now and then, there comes a politician that dares to take the real hard decisions. Sometimes, they grow into legends (Margaret Thatcher, Winston Churchill and Franklin D. Roosevelt), but often they are almost forgotten (Dwight Eisenhower). Most politicians, however, prefer mediocrity and clientelism as their main survival strategy.
5. Don’t underestimate the pigheadedness of politicians in retrying solutions that didn’t work before.

This is a natural result of bullet 5. Retrying something that didn’t work the first, second or third time, is much safer than making the really hard decisions. Therefore Greece will probably get its money and the US will probably get their QE3.

6.  Accept that the power of the financial markets to wear countries down is much larger than their financial staying power.

If something has been proved over the last years, it is the truth of this statement. It didn’t matter how much money the ECB, IMF and the countries of the Euro-zone threw in during the sovereign bond crisis. The financial markets could wear them out anyway.

In my opinion, this does not happen intentionally (except for maybe a limited number of cases), but just because the market smells the weak points in government statements and gets scared to death.

And when the billions of dollars and euros are flying around like leafs in the fall, you know the financial market will win again.
7. Economists are like frogs in a wheelbarrow: jumpin’ to all sides. And there is always a side that fits you.

Unlike mathematics and fysics, economics is not an exact science, but a series of theories, definitions and ‘best practices’, often based on mass-psychology. And masses do what you think they do, until they don’t!

In economics, there is no fundamental truth. Everybody that states otherwise, is a believer of his own truths (that includes the writer of this, by the way) and just as wrong as the other believers that he abolishes.

That is the fundamental weakness of the profession. There is always an economic theory that supports your approach of a crisis, whatever that approach is. This makes listening to economic pundits suitable for reflection of thoughts, but unsuitable for funding your decisions upon. Therefore it are politicians that take decisions and not economic professors.

8. Large crowds can be wrong: don’t put your blind trust in their wisdom.

Especially among populists, there is a religious belief in the ‘vox populi’: the voice of the people. They exaggerate the wisdom of crowds and think the larger the crowd is, the wiser its decisions will be. History has enough shocking examples of the falseness of this opinion.

Also in the sovereign crisis, the vox populi cannot always be trusted:
·   The Greeks in general don’t want to pay more taxes and work longer, even if it could save their country.
·   The people in other European countries want to kick Greece and the other PIIGS out of the Euro, even if this is virtually impossible and would cost them much more money eventually.
·   Many people want to abolish the EU and the Euro, although these brought them enormous wealth and prosperity.
·   Most crowds go for the easy solutions that won’t solve anything, rather than looking at things from different point-of-views.
·   Crowds believe the stories of populist reactionaries that in the past everything was ‘so much better, when all foreigners were still living in their own country’. Whenever that time has ever been?!

Of course, there are many times that the crowds are right. I won’t deny this. But it is the wisdom of good politicians, that decides when to follow the crowds in their opinions and when not. Therefore the need for politicians with a backbone is today greater than ever.
9.  The market does not make people and companies smarter and more honest
Some economic and financial pundits think that the market makes companies and people smarter and more honest. And think that the market will punish all bad / dishonest behaviour. They also think that every kind of government intervention is bad.

The market, so is their statement, will catch people and companies that don’t play by the rules and it will punish them. These people should ask:
·    Was is the market that disclosed the practices of Bernie Madoff?
·    Was it the market that caught the representatives of Enron?
·    Was it the market that shed a light on the dishonest bankers?
·    Was it the market that caught the countries that were not telling the truth in their annual reports, statements and statistics?

If you answered one or more questions with ‘no’, than you understand that supranational governmental supervision will always be necessary.  It is not the football match that keeps football teams fair and square: it is the referee. And that is a lesson that should always remembered.

10. Forget the last nine lessons; the next crisis will be totally different.

The most important lesson to learn from this credit crisis, is that the next crisis is almost impossible to predict. People will go on making mistakes and big mistakes will inevitably lead to new crises.

The main reason for this is, that people took counter-measures against every circumstance that caused the last crisis and then start to think that all circumstances causing crises are wiped off from the face of the earth. Hence: eternal economic growth is finally on its way.

And yes, people are thinking that in every secular bull market.

Monday, 27 June 2011

An SMS from Ernst (11): Short messages service

Last weekend, there was – apart from the news on the Chinese visit to Europe, that I put down in the article ‘China loves Europe’ -  a tidal wave of economic news. And if you want to describe this news in an alternating fashion, you should come up with as much varieties of the word “bad”, as you can think of.

The situation in Greece

The following article on Bloomberg is bad news in a disguise of good news. French banks have ‘voluntarily’(never was a word so much displaced) rolled over Greek sovereign debt in order to avoid a Greek default. Here are the pertinent snips:
French banks, including BNP Paribas (BNP) SA, have told the French government they are willing to partly roll over maturing Greek government bonds in a bid to avoid a default by the debt-laden nation, three people familiar with the plan said yesterday.
Under the proposal discussed in recent days between the French Banking Federation and the French Treasury, bondholders would re-invest about 70 percent of Greek sovereign debt maturing from mid-2011 to mid-2014, said one of the people directly involved with the talks.

Fifty percent of the redemptions would go into 30-year Greek securities, with the remaining 20 percent invested in a fund made of “very-high quality” securities that would back the 30-year bonds, that person said. The proposal may be altered, he said. All three people spoke on condition of anonymity because the talks are ongoing and private. 
European governments are seeking to persuade the region’s banks to voluntarily participate in Greece’s second bailout to make the country’s debt burden more sustainable. European banks held about $52 billion of Greek sovereign debt at the end of last year, according to Bank for International Settlements data, with French banks owning $15 billion, the second-largest position after German banks, which owned $22 billion.

European Union leaders at a Brussels summit that ended June 24 backed a new aid program to stave off a Greek default so long as Greek Prime Minister George Papandreou shepherds 78 billion euros ($111 billion) of austerity measures through parliament in a vote slated for June 29.

French President Nicolas Sarkozy told reporters in Brussels on June 24 that he had “no apprehensions or difficulties” about the discussions with banks, while Prime Minister Jose Luis Rodriguez Zapatero said Spanish banks are “well disposed” to private-sector involvement as their positions are “small.” Talks are also under way in the Netherlands. 
German Chancellor Angela Merkel’s government said June 24 banks and insurers will recognize their “very high interest” in sharing the burden of a Greek financial package and an agreement will be reached in the next nine days.
European finance chiefs will decide on July 3 whether Greece has met conditions for its next aid payment.
The effect of this French action to avoid a Greek default, might be the exact opposite, as  it could very well trigger a credit event in the eyes of Moody’s and Fitch. According to some financial insiders on Twitter, this French action IS even a credit event.

The discussion on the Greek government defaulting, without it being mentioned, reminds me of a classic episode of the extremely funny British comedy Fawlty Towers: don’t mention the war’.

In this case all countries in the Euro-zone are talking about Greece, like Basil Fawlty, without ‘mentioning the credit event / default’, in order not to trigger the rating agencies Fitch and Moody’s. Because, if these rating agencies would call this a credit event, all credit default swaps on Greece should be paid out. And every Euro-zone country tries to avoid that, in order to prevent a financial meltdown in the Euro-zone.

The problem is, however, that Greece is the elephant in the room and everybody knows it is there and waits for the moment its trunc blows all saving schemes away. And the trunc: that is probably the Greek opposition and population that will presumably get rid of all of Papandreou’s austerity measures.

Basel committee sets new capital demands

Some wise people said: everybody is always fighting yesterday’s war. And although this is not totally true for the new capital demands of the Basel Committee, there is a hint of truth behind it. So instead of preparing for the next financial crisis, most supervisors and officials are trying to solve the last one.

The following article on the Basel capital demands appeared on Bloomberg. Here are some pertinent snips:
Banks should be pushed to meet the higher capital requirements before a series of deadlines starting in 2013, unless earlier introduction of the rules would threaten lending, the Bank for International Settlements said.

The Basel Committee on Banking Supervision’s requirements, which will more than triple the core reserves that banks must hold to protect themselves from insolvency, are “the core regulatory response to problems revealed by the financial crisis,” the BIS said in its annual report. The stance of the group that acts as a bank for central banks echoes comments by Mervyn King, governor of the Bank of England, that U.K. lenders can “do more than just follow” the timetable for meeting the standards.
“Countries should move faster if their banks are profitable and are able to apply the standards without having to restrict credit,” the Basel, Switzerland-based BIS said. National regulators should treat the rules, known as Basel III, as a “minimum” standard that they can surpass if they wish.

Global central bank governors agreed this weekend on extra capital rules for banks whose size or systemic importance means their failure could cause another financial crisis -- a narrower set of institutions than those that will have to comply with Basel III. Regulators agreed that as many as 30 of the world’s largest lenders should face surcharges that range from 1 percentage point to as much as 2.5 percentage points of core capital to prevent them from causing another financial crisis. 
The Basel III capital rules are scheduled to be phased in from 2013 through 2019. The BIS is the parent organization of both the Basel committee and the Group of Governors and Heads of Supervision, which oversees the committee’s work.

Under Basel III, banks will be obliged to hold core Tier 1 Capital equivalent to 7 percent of their risk-weighted assets, compared with 2 percent under the previous international rules. As many as 30 of the world’s largest banks will be required to hold the additional capital under the plans agreed on this weekend, meaning they may have to hold as much as 9.5 percent in reserve.
U.K. banks can “do more than just follow” the timeframe for complying with Basel III, King told journalists in London on June 24. “It would be better if they were slightly ahead of the schedule.”

The Basel rules constitute “minimum requirements” that individual countries can exceed, the BIS said, mirroring calls by several European Union finance ministers, including George Osborne, that national regulators should be left free to toughen the rules for their banks.

German people are ‘sick and tired’ of the Euro.

Germany, together with The Netherlands the creditor of last resort for the Euro, has to deal with increasing protests against the euro on its home turf.

Bloomberg reports on the desire of German family-run companies to get an exclusion clause in the Euro treaty.

An association of German family-run companies says it wants mechanisms included in the treaty governing Europe’s single currency that would allow countries to be excluded from membership, Die Welt reported. 
Around a hundred firms belonging to the Stiftung Familienunternehmen signed a letter to lawmakers saying it should be made possible for a country to exit the euro or to be excluded for running excessive deficits, the newspaper said.
The German website writes upon an investigation executed by the ‘Frankfurter Algemeine Zeitung, on the trust of German citizens in the Euro. The article is translated to English by me. Here are the pertinent snips
Allensbach interview: Germans doubt on the Euro and the safety net
The enduring debt crisis in Greece causes increasing doubts on the common currency among the Germans people. The German trust in the Euro is decreasing during the last months, according to an investigation executed by the Frankfurter Allgemeine.
Only 19% of the people interviewed have great trust or even very great trust in the Euro, while 71% of the Germans have a negative or even very negative view towards the Euro. The other 10% has a neutral view on the Euro or withdrew from the interview.
Since April 2011, the number of Euro sceptics in Germany has risen by 5%, as then 66% stated to have lost trust in the Euro. Compared to a 2008 investigation, the results are even more dramatic: only less than half of the Germans lost their confidence in the Euro at that time.
Also the so-called ‘European safety net’, installed with lots of ‘pomp and circumstance’, enjoys little German trust. More than 65% of the German population in the interview doubts the sustainability of the protections it offers, while only 15% has enough trust in it.

I have always had a firm trust in the Euro and I am convinced that everything will work out fine in the end. But we can’t lose the Germans in this process.

Therefore I state now, what I stated a few days ago: it is time to end the bailout madness:

My reaction is: let us not go on growing the financial cancer larger and larger in our desperite attempts to avoid the car crash:·         Let Greece take the pain of a default now. It hurts for a while, but they can start to rebuild Greece with fresh energy and reduced debt. Because: if Greece has to go, it has to go and there is no way that Europe can prevent this without causing massive pain in Greece and the rest of the Euro zone. So please let us stop trying. 
·         The same goes for Portugal and Spain: their unsustainable (youth) unemployment and educational problems should be cured, before these countries can return to growth. It is not to Europe to keep for them all the balls in the air, like a juggler. Not, because I don’t like these countries, but simply because it’s impossible to do. And the financial markets know that. 
·         For Italy and Ireland, I have not so many worries: Italy is still an industrial leader with worldclass products and Ireland seems to have some light at the end of the tunnel. 
·         And as far as the Dutch banks are concerned: if they need state support again, then it is time to remove the current management layers and put a new generation of managers with more awareness in. And please let’s then get rid of the bonus boys. 
·         Also the shareholders and bondholders of the Dutch banks should in this case foot the bill for the adventures of the banks on the international investment markets. 
But please let’s stop with this bailout madness, as this not solves the situation in the PIIGS-countries, but only makes it worse. In these countries as well as in our own national financial markets

I hope the European leaders will see the truth of these words very soon.