Hankel has already warned in 2005 that the Euro system is unsustainable.
While I am still wondering to whom Germany will sell all the goods it now produces (and warehouses) when all important trade partners face the same economic and social problems, Hankel focuses on the adverse effects the hastily pushed through financial aid laws for Greece - which is already running into difficulties to comply with the austerity conditions that are part of the bailout - will have on Germany in the future.
He warns of dire consequences and states that Merkel may run afoul of the German constitution and her oath to stave off the German sovereign from bad damage.
Poll: 98% Want a Public Referendum on Eurozone Aid
The letter, supported by such German academic capacities like Wilhelm Nölling, Karl A. Schachtschneider and Joachim Starbatty has been co-signed by 7,315 German citizens since August 18. His first letter was co-signed by 6,128 sovereigns.
A poll on his website asking whether there should be a public referendum on Eurozone aid shows that 98% of voters are in favor of a direct democratic decision.
Here is Hankel's letter translated into English.
Honored Federal Chancellor,
unfortunately you have not answered my first letter dated March 27, 2010. For this reason I have to repeat my concerns as the problem approaching Germans and Europeans has become worse meanwhile.
Both the "Greek Aid Law" from May 7, 2010, as well as the following "Emergency Umbrella Law" from May 7, 2010, do not only constitute strong offences against EU law, but also against our own German constitution.
You know the situation due to the legal action introduced by 5 university professors at the German constitutional court. Your assistants have informed you of this as well.
This is a case of breaking the law in the most severe way. This is even more dangerous than the economic consequences. Europe is the homeland of states ruled under the law. The Euro will not regain its former strength but it will be relegated into a European soft currency.
Those countries close to a state default, especially the southern, but also the western Eurozone, will neither get out of debt nor will it change their past behaviour. After all the money of the rescue fund does not flow to the states but to their insolvent banks. And the governments of these countries will not fulfill the conditions coming with the rescue funds, as doing so would endanger their political and economical stability.
It is highly implausible when your finance minister announces austerity packages while allocating 70% of annual federal tax revenues for rescue packages whose failure is already written on the wall.
Germany and the few other still economically stable countries in the Eurozone are sinking money into a barrel without a bottom. This money, that the German taxpayers will have to come up with, will be lost for German citizens and their future. By now you had to acknowledge that our country can neither fulfill its social obligations, nor satisfy its promises to keep and create jobs. I am confident you will live to see that this austerity policy will lead to similar effects as we see them nowadays in Greece: protesting people, burning cars, shattered windows and maybe still worse actions. Can you account for this?
I appeal to you to repeal these laws before the constitutional court will nullify them. Your oath included "to fend off damage for the German people" - with this you stand the chance to do so. The emergency umbrella from Brussels will not save the common currency.
This is my and our public call to the German sovereign and to you. Realize it!
Wilhelm HankelFor those who just came out of a coma: Germany is on the verge of burning thanks to the hubris of a government that seems to be more interested to keep a disintegrating Eurozone alive than comply with its social obligations to the sovereign.
As all fiat currencies in the past 3 centuries the Euro is doomed to failed and there is a growing chance it could fail before year's end. This is all gonna end really, really bad. TV footage from Greece should show those at the power levers that policy has to be designed for the sovereign and not for the rescue of irresponsible bankers.
Unfortunately European politicians still draw a total blank in assessing the current economic situation, blogging Spain based economist Edward Hugh says in this post.
German speaking readers may find the following writings of Hankel of interest:
DISCLOSURE: No related speculative positions. Long bullion gold/silver.