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To: GROUND ZERO™ who wrote (34544)	7/5/2012 9:09:58 AM
From: fred woodall	Read Replies (1) \| Respond to of 220946

German Economists to Launch Protest Against Latest EU Agreements -Report by Franziska Scheven WSJ BERLIN--Leading economic figures in Germany called on politicians and citizens to block a banking union and other decisions that were taken during the European Union summit in Brussels. At the summit last week, German Chancellor Angela Merkel caved in to pressure from other euro-zone countries to allow the European Stability Mechanism, the euro zone's permanent bailout fund, to directly boost the capital of struggling banks instead of restricting it to lending only to euro-zone governments. The most prominent among the protesters is Hans-Werner Sinn, president of the Munich-based Ifo Institute for Economic Research, who has spent much of his career studying risk-taking and national competitiveness. Mr. Sinn warned that the latest agreements could harm Germany economically and that Ms. Merkel was forced by fellow euro-zone countries to make concessions. At the summit, Ms. Merkel agreed to make it easier for the bailout funds to purchase euro-zone government bonds in secondary markets. In exchange, Italy dropped a threat to block a deal to boost growth and jobs in Europe. Ms. Merkel needed the so-called 'growth pact' because she promised it to the main opposition in her parliament at home as a condition for the opposition's agreement to ratify the ESM and the European fiscal pact on budget discipline. Mr. Sinn says a banking union will lead to common deposit insurances that are three times as big as government debts. It will be "impossible" to have tax payers in stable European countries pay for these debts. This will result in bad relations with neighboring countries, he said. Mr. Sinn has warned about the buildup of risk in the banking system already, in 2003, and called for tighter regulations to contain it.