April 23rd, 2012
(HigginsBlog) – The Dutch government has collapsed as the Prime Minister handed in his resignation following this weekends news of the rejection of austerity measures needed to save the Euro.
Today’s bloodbath in global equity markets is about to get worse as news just hit the wire that the Dutch government has collapsed following the resignation of the nation’s Prime Minister.
European equity markets (blue) collapsed today back to Credit’s reality and beyond as they broke to 3 month lows…
and IBEX near 2009′s lows…
As I reported on Saturday, the Dutch government was facing collapse after politicians rejected EU mandated austerity measures needed to secure an EU bailout to keep the Euro alive and fight of the contagion that has now officially led to a depression in Greece and has Spain teetering on the brink of collapse.
Making the bloodbath worse are news headlines that the Chinese manufacturing has contracted for 6th straight month in a row.
Combine that with news coming out of France that has the Global banking cartel shaking in fear – The candidate who won the first round of the French elections and is expected to win by a landslide in the upcoming run-off against Sarkozy plans on rejecting EU austerity measures while promising to “rip up France’s agreement to the European fiscal pact.”
That is truly disturbing news since the entire Eurozone is being kept afloat on the backs of German and French taxpayers.
Remove France from that picture and that leaves only Germany is the sole nation in Europe that can significantly fund the Ponzi Bond bailout.
Then there is the embarrassing secret memo to German Chancellor Merkel that was translated into English and leaked to market watch that could potentially destroy French-German diplomatic ties and even lead to the ousting of Merkel during the next election cycle.
Regardless of the future of French-German relations, Europe is witnessing the rise of far-right nationalism and populism that hasn’t been seen since Hitler seized upon such sentiments. In fact, 18% of the first round of the French election went to the leader of what is described as France’s “Neo-Nazi” party.
With the collapse of the Dutch government financial Armageddon only grows closer in Spain and the removal of French support for the EU’s fiscal pact would be an absolute disaster for the Euro and the emergence of the far right among the masses in Europe spells real trouble for the globalist blanking cartel.
CNN reports on the Dutch government collapse.
Dutch government collapses after far right pulls plugSTORY HIGHLIGHTS
- NEW: Lammakers will meet Tuesday to decide how to go forward
- Mark Rutte’s government depended on the support of Geert Wilders’ Party for Freedom
- The far-right party did far better than anyone expected in 2010
- The country could hold new elections within months
(CNN) — Dutch Prime Minister Mark Rutte resigned Monday after a far-right party withdrew its support for his government, a government spokesman said.
The move may clear the way for early elections in the Netherlands, possibly as soon as this summer, the government said.
Lawmakers are scheduled to meet Tuesday to decide how to go forward.
The secret leaked memo:
In the wake of the first round of the French presidential election, a leaked document from Berlin, conveniently and somewhat revealingly translated into English, has found its way into MarketWatch’s hands.
Memo to Chancellor
Bundeskanzleramt, Berlin, 23 April 2012
From [ ] NAME BLACKED OUT
Esteemed Bundeskanzlerin, I am sorry. The results of the first round do not look good. I have to tell you that French elections traditionally propel change in the Franco-German monetary alignment. One of the reasons for monetary union in Europe was, as you may recall, to free us from the old style of doing things. But France is an old nation, and old patterns die hard. The French seem to be becoming more French, just as we are growing more German. So I would get ready, distinguished lady, for another change now. Read our full coverage of the French election.
1. Let history be your guide. Two months after the French presidential elections in June 1969 that brought Georges Pompidou to power, France devalued the franc. In March 1976 a regional election reverse for President Giscard d’Estaing’s party prompted the franc’s departure from the Snake (the forerunner of the European Monetary System, EMS). In March 1978 an unexpected victory for Raymond Barre in the parliamentary elections catalyzed Chancellor Schmidt and Giscard to press ahead with the EMS. François Mitterrand’s May 1981 victory ushered in turbulence and three franc devaluations in the next 22 months. Victory for the right in the March 1986 parliamentary elections brought a franc devaluation one month afterwards.
2. In September 1992 the narrow referendum majority for the Maastricht treaty forced heavy franc selling, where the French only narrowly avoided devaluation after some furious encounters with the Bundesbank. In 1997 President Jacques Chirac rashly dissolved the National Assembly, allowing in a Socialist government under Lionel Jospin in June, undermining France’s commitment to the single currency. Need I go on? I believe you get the message.
3. Spreads between French and German bonds will likely rise this week. In any public statements, avoid saying that a rise in French interest rates is a good thing that will force the French to be more disciplined. Leave that kind of thing to Weidmann at the Bundesbank. Anyway, he’s more convincing that you are.
4. Consider appointing Hermann Gröhe ambassador to Mongolia! When you made him the general secretary of the Christian Democrat Party, surely part of his brief was not to travel to Paris in January and say you were going to campaign for Sarkozy. Gröhe’s attacks on Hollande three months ago for proposing “outdated concepts and left-wing dreams from the ragbag of politics” may have appeared clever at the time. I recall witness you chortling over the choice of words. However you will probably be seeing Hollande as president-elect in just over two weeks. So you will have some explaining to do.
5. Gröhe said Germany needs “a strong France with a strong president at the helm.” Tell Hollande we had him in mind all along. Also mention that the reason why you decided you didn’t want to campaign for Sarkozy after all was because you wanted to even up the contest and give Hollande a sporting chance. Hollande’s a decent man, and he’ll have other things on his mind. He may act as though he believes you.
6. Hollande says he will renegotiate your favorite fiscal pact to produce more growth. Tell him that you, too, are in favor of that. The Germans are not masochists! We have added the word “growth” to various European texts (please see various enclosures). Believe me, it works wonders! A lot of people in Germany favor higher wages. And they all have votes! Your big problem will be to get the Bundesbank to pay for it. Ring Weidmann this afternoon and tell him … I mean, ask him, what he thinks of the idea. (But don’t tell anyone you’re doing it. It’s strictly speaking illegal to give the Bundesbank instructions. Come to think of it, it may be time to set aside that bit of legislation. Leave it to me, I’ll fix that.)
7. Commentators will emphasize that Sarkozy is the latest European leader to fall foul of the “EMU syndrome.” They will say he’s a loser. They are right. That’s what makes him different from you. Don’t forget this. In the German elections next year, you can buck the trend. You may have to call on the support of the Social Democratic Party. My advice is to telephone Peer Steinbrück. After all, as your finance minister in the Grand Coalition a few years ago, he had several furious rows with the French. A good man! Ask whether such a coalition could be put together again. Just in case.
8. If you can get on to the front foot with Hollande, and blame the previous gaffes on someone else, you will have a good chance of building an excellent relationship. Don’t forget: All the leading Franco-German alliances since the Second World War have been between men (yes, all men) of differing political persuasions. You can do at least as well as they did.
9. Hollande will have lots of allies in Europe and so you had better get used to speaking to Social Democrats again.
10. Many people will point to Hollande’s statement last week: “Germany cannot remain an island of prosperity in the middle of an ocean of recession.” Building growth rather than pressing austerity could be an election winner. For you, I mean, not just for him! There’s a downside: the Bundesbank will have to tolerate an inflation rate of 3% to 4% for the next few years as well as Germany moving to a current account deficit. You know this. Weidmann knows this. And you know Weidmann. He will have to see eye to eye with you on this. Weidmann can’t have changed that much, surely, since he went off to Frankfurt a year ago? For a start, can you ask him to stop talking so much about Target-2? It’s getting on everyone’s nerves. Shall we speed up that telephone call to Weidmann? Shall I get him on the phone for you, immediately?
END OF MEMO
Source: Market Watch
My previous report on the Dutch government being on the brink of collapse:
The Dutch government is on the brink of collapse after politicians hit an impasse on implementing austerity measures required to secure a bailout.
As the economic and technical data points to financial Armageddon looming in Spain Dutch politicians are deadlocked over the decision to implement brutal austerity measures to secure an economic bailout or to tell the bankers to shove it and take the path of Iceland.
Dutch politicians have announced they can not come to an agreement on austerity limits required to secure the bailout to save the Dutch economy.
After failing to come to an agreement with the Prime Minister, Freedom Party leader Geert Wilders announced that his party no longer supports the government and is now calling for new elections to be held as soon as possible.
Press TV reports:
Dutch Government On Brink Of Collapse
The Dutch government is teetering on the brink of collapse following the failure of talks to decide whether to adopt austerity measures to cap the country’s budget deficit.
Press TV – On Saturday, Prime Minister Mark Rutte and Freedom Party leader Geert Wilders were unable to come to an agreement on austerity measures to meet European Union limits.
Afterwards, Wilders stated that his party no longer supports the government and that new elections should take place, “the sooner the better.”
Wilders “walked away at the very last moment,” Rutte told reporters in The Hague, adding, “Elections are the next logical step.”
The negotiations on a 16-billion-euro austerity package to rescue the Dutch economy began in early March after the economy plunged into recession and forecasts showed the 2013 budget deficit would reach 4.6 percent.
The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which has led to social unrest and massive demonstrations in many eurozone states.
The news comes on reports that Spain is about to enter full scale collapse.
Economic data and technical data coming out of Spain is telling us point blank that disaster is looming and will trigger the dominos to fall across Europe.
The perfect storm of an economic collapse fueled by an all out housing and mortgage crash, a sovereign debt crisis, and a run on the over-leveraged unregulated Spanish banks is hammering Spain right now.
The IMF and the ECB knows that Spain is too big to bail out which is really bad news considering the economic data and technical indicators show irrefutable evidence that Spain is about to enter a full-scale collapse which will in turn send the dominoes falling across Europe.
Last year we were repeatedly warned that if Greece defaulted the result would be Financial Armageddon and even warned America could lose its financial sovereignty.
The when Greece finally defaulted, the media downplayed the ramifications and claimed the debt contagion wouldn’t spread.
They lied and there is a reason that Spain has banned all cash transactions over 2,500 Euros and the IMF is raising the alarm that the debt crisis will persist throughout all of 2012.
There is a reason that the IMF is warning of a collapse of the Euro and full-blown financial panic.
Plain and simple, whether the media will admit it or not, Spain is next.
Brace yourself because doomsday is rapidly approaching for the entire global economic system.
Via Zero Hedge, Graham Summers reports:
Spain is About to Enter a Full-Scale Collapse.
A few facts about Spain:
• Total Spanish banking loans are equal to 170% of Spanish GDP.
• Troubled loans at Spanish Banks just hit an 18-year high.
• Spanish Banks are drawing a record €316.3 billion from the ECB
(up from €169.2 billion in February).
Things have gotten so bad that Spanish citizens are pulling their money out of Spain en masse: €65 billion left the Spanish banking system in March 2012 alone.
Source: Alexander Higgins
April 23, 2012