Germany is reported in the Telegraph to scupper plans by the British on a referendum to overhaul the EU. It goes a little deeper than this as a leaked memo from the German foreign office to outline plans for an intrusive new European body that will be able to take over the economies of beleaguered eurozone countries.

It discloses that the EU’s largest economy is also preparing for other European countries, which are too large to be bailed out, to default on their debts — effectively going bankrupt. It will prompt fears that German plans to deal with the eurozone crisis involve an erosion of national sovereignty that could pave the way for a European “super state” with its own tax and spending plans set in Brussels.

so more power to Germany again 😉

The six-page German foreign ministry paper sets out plans for the creation of a European Monetary Fund with a transfer of sovereignty away from member states.

The fund will have the power to take ailing countries into receivership and run their economies. Even more controversially, the document, entitled The future of the EU: required integration policy improvements for the creation of a Stability Union, declares that the treaty changes are a first stage “in which the EU will develop into a political union”. “The debate on the way towards a political union must begin as soon as the course toward stability union is charted,” it concludes.

The negotiating document also explicitly examines ways to limit treaty changes to speed up the reforms. It indicates that Mrs Merkel will tell Mr Cameron to rule out a popular EU vote in Britain.

It was reported in the Guardian

Documents seen by the Guardian, including a green paper on stability bonds (eurobonds), show Brussels envisages a huge transfer of national sovereignty to the centre in order to ensure there is no repeat of the sovereign debt crisis – and guarantee a solution to the current one. The aim is to regain the confidence of financial markets by tying any current bailouts or future loan programmes for distressed countries to improved economic governance and competitiveness sanctioned by a “stability commissar”.

they go on to say

The commission’s plans include monitoring of national economies going beyond that meted out to Greece, Portugal and Ireland. In effect, unelected officials would have power to veto national budgets of eurozone members. This follows the furore in Ireland when the government’s draft budget was leaked first to the Bundestag in Berlin.

Even though the loss of national sovereignty would be extensive, some Brussels officials argue they do not require treaty change, let alone referendums.

Eurozone governments would also be urged to enshrine fiscal rectitude in their constitutions – on the lines of the German “debt brake” – and to draw up budgets on advice proffered by a UK-style independent office for budget responsibility.

A 40-page green paper on stability bonds, meanwhile, outlines proposals for pooling sovereign risks via a central European treasury or debt management office. This and enhanced budgetary surveillance are required, it says, to minimise “moral hazard” among countries in financial distress.

In order to ensure that the EU sticks to its “no bailout clause”, the paper talks of granting “extensive intrusive powers at EU level”, including putting a country into administration or imposing seniority of debt service over all other forms of public spending.

Max Keiser gets in on the act. An article with Acitve Investor Max Keiser says

“With the eurozone breaking up, you have a reunified Germany, you have people talking about bringing back the Deutsche Mark, they have the Bundesbank ready to go. So you could see, either Germany breaks out and you have the emergence of a superpower, Germany 4.0 as I call it. Or they’re within the eurozone but there calling all the shots and everything is going through Berlin and effectively they’re running the show in Europe.”

It sounds like some country is getting to big for its jack boots.

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