Sarrazin, His Independence, And That of The Bundesbank

Monday, August 30, 2010

German Bundesbank executive Thilo Sarrazin digs his heels in deeper as calls for his resignation mounted on all sides on Monday. Presenting his new book “Germany Eliminates Itself” the controversial central banker said his ideas were scientifically founded and claims he was Anti-Semitic were "absurd".
The Bundesbank picked up the ball with a statement that certainly won't earn him a promotion there any longer:

The Executive Board of the Deutsche Bundesbank distances itself categorically from discriminatory remarks made by its member, Dr Thilo Sarrazin. Dr Sarrazin, a former member of the Berlin Senate, has repeatedly and persistently made provocative statements, especially on issues relating to immigration. These statements have no connection the tasks to the Deutsche Bundesbank (sic!) In making such remarks, Dr Sarrazin is not expressing the opinions and views of the Deutsche Bundesbank... 
In his statements, Dr Sarrazin has been breaching this obligation repeatedly and to an increasingly serious extent.
The rest of the release deals with technical matters that delay an immediate booting.
It is an urgent matter, though. Central banks at the heart of the financial crisis are likely to be reviewed by parliaments when the current crisis will finally have unwound in an unorderly manner as in all other crises before.

The Bundesbank, stability watchdog for the now-famed Deutsche Mark was able to do so because it never mingled in the government's business and built an independence rarely seen among central banks. It must not be gambled away by offering the right side without protection. This is all the more important as the Bundesbank has only last week grounded any ideas that it would sell anything from its 3,600 ton hoard for budgetary purposes, a regularly upcoming demand that has so far never been satisfied. Germany has signed the Central Bank Sales Agreement, but never took part in gold sales, only spewing out a few bars for minting per year.
It has to be noted that Sarrazin has it not found worthy to take back anything he said against Africans, Middle Easterners, Spain's Basques and Turks. Turks are the largest foreign community in Germany where unprecedented multi-ethnic frictions stack up to the country's biggest political problem.

German's best-selling daily "Bild"fired a big-letter "Last Warning Shot for Sarrazin" with other media busy reporting the sharp rebuttals from official Germany and background pages on scientific facts that tore up Sarrazin's thesis in mid-air. 2000+ German media reports have been rarely unified in asking for the political self-hygiene that has worked so well since 1945 in Germany.
In short for markets: He will go after stirring up Germany's darkest chapter. Bundesbank remains independent.


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