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Protect And Survive
At the weekend, Germany's Chancellor Angela Merkel provoked chaos in European treasuries when she appeared to assure Germans that the government would cover their savings in the event of a banking collapse.
"We tell all savings account holders that your deposits are safe. The federal government assures it", she said. Other nations, such as Britain and France, were reportedly preparing statements to the same effect to head off a tsunami of deposits from their banks to German rivals.
Merkel has since backpedalled, claiming that the statement was a political rather than economic one. Still, neither reading has calmed the European stock markets, which have fallen around five percent (and counting) in the course of the morning.
Could this be because while Germans (and everyone else) are reassured that the government is guaranteeing their savings, they are unsettled by what Merkel's statement says about the scale of the crisis?
Rather like the government promising every home a nuclear fallout shelter. Whew, that's a relief we're getting one of those... but hang on... WHY DO WE NEED ONE? WHAT DOES SHE KNOW?
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