To mark the occasion, the German paper Handelsblatt features on its website this interview by a reporter from some Sports Information Service (German abbreviation SID) with the President of the International Paralympic Committee (IPC), the Briton Sir Philip Craven – who is apparently disabled himself, traveling around in a wheelchair, and also a past paralympic athlete of some note. By and large the transcript is rather humdrum – e.g. how did Sir Philip like the just-concluded Winter Olympics, which nation’s team does he expect to win the most medals at the Paralympic Games, and the like. But one exchange does stand out for me:

SID: “Turin 2006 [i.e. the last Paralympics] had no doping-cases. Do you think this will be different this time?”

Craven: “I hope not. We’re working together very closely with the World Anti-Doping Agency (Wada)and continue to emphasize the educational aspect of this work. And it’s clear: If there should be cheaters, they’ll be caught and punished.”

I get it: There will probably be no doping-cheaters turning up at these Paralympic Games. And I have to say that I’m rather relieved to learn that.

One other thing: at the end of the interview the two discuss the recent application made by some snowboarding federation for snowboarding to become an official paralympic sport. Can somebody please explain (or draw a diagram) how paralympic snowboarding is supposed to work? If you e-mail me something, I promise I’ll add it to this post as an Update, with credit to you.

                          

We do have at least a start, with Marcus Ziener in the German business newspaper Handelsblatt of all places (The president’s eternal string-puller). He zeroes in (as does Rove in his book, apparently) on the Iraq War and Hurricane Katrina – two of the George W. Bush administration’s biggest blunders, but not to hear Rove tell it. No, they were just unfortunate misunderstandings. Bush’s “Heck of a job, Brownie!” was nothing more than a gesture of morale support to a staff-member under pressure. And as for Iraq, the President was certain Saddam had WMD – he certainly would not have invaded the country at all had he known that he didn’t.

Up in his piece’s lede, Ziener makes the rather obvious observation that, with this book and the new publicity tour designed to sell it, Bush’s former leading political strategist is out to rehabilitate not only the reputation of the president he served, but also his own. Actually, it probably goes rather beyond that: when it comes to waterboarding and other “enhanced interrogation techniques,” Rove (along with some other involved officials, especially former VP Dick Cheney) apparently feels the need to take some pre-emptive action to ward off a potential criminal indictment for conspiracy to torture – a crime against humanity all of us can recognize when we see it, and contrary both to the Geneva Conventions and US law. This lashing-out is what we see in his statement yesterday to the BBC in which he asserted he was even “proud we used techniques that broke the will of these terrorists.” (You can click the video on that BBC page to hear the words come out of “Turdblossom’s” very mouth; for me, hearing his voice this morning was all I needed to quickly switch to some other radio station.)

And again, reaction in the European press is disappointing so far. (Of course, less time has elapsed since Rove went on the BBC.) What there is, is generally just a straight transmission of his remarks, suitably translated. At least we do have Lidové noviny of the Czech Republic (Waterboarding is not torture, assets former Bush advisor). Yes, the report itself (from the Czech news agency CTK) just passes on what Rove has to say. But some on-line editorial assistant has also shrewdly inserted counterpoint in the form of a brief YouTube video about waterboarding from Amnesty International. (Check it out, if you want: it’s not so very shocking, even as it makes the point.)

UPDATE: Look, I don’t intend to touch Rove’s book with a ten-foot pole. But if you’re interested, I do have to admit that it’s still available from Amazon (at that link I gave you at the top of the post) for $16.50 with free shipping and mishandling (h/t to late-night comedian Jimmy Fallon).

                          

UPDATE: Correction! Looking at that original German piece, it clearly comes originally from the Frankfurter Allgemeine Zeitung or FAZ – often called Germany’s own New York Times. I have noticed before how the two papers clearly have an arrangement allowing Handelsblatt to reprint certain FAZ material. Credit where it is due . . .

The fever-curve of the Greek debt crisis
By Markus Frühauf
20 February 2010

Trade in the risk of Greek insolvency in the past five months has enabled fantastic earnings. That is made clear by the price-development for credit-default insurance on that financially-weak Euroland. On 16 October 2009 a Credit Default Swap (CDS), which investors use to insure themselves against insolvency from Athens, still cost 123 basis points (1.23 percentage points). This meant a yearly premium of 12,300 euros in order to insure a claim on 1 million euros. On 4 February the insured had to pay 42,820 euros for that, a fee three times as high. Greece’s risk-premium – in market jargon the CDS spread – is the fever-curve of the debt crisis.

For the growth in the expense of the insurance against non-payment reflects the reduced creditworthiness of the country. Speculation in the CDS market began after 4 October 2009, as the Greek Socialists celebrated their election victory. Two weeks later the newly-elected government informed its Euro-partners that the deficit for 2009 was going to lie at 12.7 percent of economic performance (GDP).

Timidly, but steadily
That was a shock, since the previous conservative government had prognosticated precisely half of that. The new estimate for the budget deficit called onto the stage the first hedge funds, reports a London CDS-dealer working for a large American bank. In view of Greece’s previous history of cheating its way into the monetary union with false budget statistics, at that point a wager on Greece having payment problems was promising. This bet in the meantime has become obvious.

The rise of the Greek risk-premium at first still continued timidly, but steadily. It could be that that hedge funds had been the first to recognize Athens’ exhausted budget situation but had bet in the CDS market on a fall in the value of Greek debt with little commitment of capital. But the new Greek government’s commitment to transparency unleashed this speculation. The further rises in the CDS spread were accompanied by fundamental factors as well. On 8 December 2009 the Fitch rating agency downgraded Greece’s credit-rating from “A-” to “BBB+”. The Euroland found itself in the same category as Estonia or South Africa in its credit-worthiness. One week later Standard & Poor’s followed. Here, too, the Greeks flew out of the “A-” class denoting particularly good solvency. In this period the CDS price exceeded the mark of 200 basis-points for the first time. With these rating-downgrades the fear of a possible Greek insolvency grew by leaps and bounds on the financial markets and among Europartner countries.

Unusually high interest-coupon
A first high-point was reached when the Greek finance minister issued a new five-year loan at the end of January. The offer of 8 billion euros encountered a demand among investors three times as great. This was a calming signal only at first glance. For Greece had to fit out the loan with an unusually high interest-coupon of 6.1 percent. With this the country was playing with a risk-premium in a league with Vietnam. This fed doubt on the debt market as to whether Greece under these conditions could sustain its debt-service over the long-run – in the first instance when in April and May 20 billion euros will have to be refinanced.

Besides all that, this led to a technical effect. The old loans already on the market still bore a lower interest-coupon. They were issued back when the credit-rating for Greece still lay in the “A-” range. Some investors were forced to shift into the new debt instruments with the higher interest. In the wave of selling the yield on ten-year Greek debt increased to over 7 percent. Whoever in October had bet on Greece having payment difficulties was now rewarded: the CDS spread now clearly lay over 400 basis-points. The initial investment had more than tripled when the payment-protection was sold on.

The CDS market is influenced by the same factors as the debt market. This was evident from the falling-back of the CDS premium when signs of financial support for Athens from Europartner countries multiplied. But the problem with the CDS is that this market is much more opaque. These contracts are handled over-the-counter among banks, thus in an unregulated environment. You can also speculate much more favorably aided by credit-default derivatives than on the loan market, for there is a significantly lesser commitment of capital required.

In any case, the CDS-wager has gone up because more and more true-believers in the Greek State have come to feel the need to insure their holdings. This rapidly-rising demand for insurance has been set off by the escalation of the debt crisis. But it is past Greek governments that have to answer in the first place for the exhausted budget situation. The higher demand for insolvency protection that has driven up the CDS price follows from the evidently poorer estimation of Greek credit-worthiness.

Greek banks as insurers
On the other hand, whoever expected Greece’s rescue by Europartner countries would have had to position himself on the CDS market as an insurer, that is, as a seller of payment protection. The take in premiums from insurance protection sold provides increased revenue. But it’s on the seller-side that the weak points of the CDS market become evident. It’s still unclear who has sold insurance protection for Greece. In one study analysts from the major French bank BNP Paribas referred to market-rumors that Greek banks had insured a large sum by CDS. If this is correct, then the payment protection they have provided is worth nothing. Greek banks hold State debt of over 40 billion euros. This corresponds roughly to the entire amount of equity in the Greek credit market. A bankruptcy of the State would lead to a collapse of the banking system.

London investment bankers name AIG as a further CDS-seller. That company had to be nationalized during the financial crisis due to its having written insolvency insurance on American mortgages. This debt-load would have led to the collapse of the world’s biggest insurer. Prior to the financial crisis AIG is said to have widely held State credit-risk. If yet-larger insurance positions on Greece exist, then the American government would have a strong interest in preventing that country’s insolvency.

Even if these are mere rumors about the Greek banks and AIG, this example makes clear the weakness of CDS markets. This protection is sold by banks or insurers who themselves have access only to limited capital resources. They have as a rule clearly lesser credit-worthiness than the states for which they are selling insolvency protection. Insurance by CDS could turn out to be just a bubble.

                          

That one million figure is from a report from the EU Commission that was issued yesterday. Still, it’s also worthwhile here to go beyond the headline to look at the “fine print.” Haiti actually had around 386,000 orphans even before the quake struck last January 12, and the “one million” here also includes those who the authorities think have simply been separated from their parent(s) by events. And actually, the kidnapping of children for nefarious purposes (including being sold into slavery somewhere else) has long been a problem there; the chaos in the earthquake’s aftermath has only made it much worse.

On the bright side (and it’s a bright side that we need after that previous paragraph), UNICEF has announced that it is setting about immunizing 700,000 Haitian children against measles, diptheria, tetanus, and whooping cough. Also, as you probably have already heard, around 100 top pop-artists of past and present have gotten together to record a new version of “We Are the World,” with proceeds to go to Haitian relief, and the resulting single will be unveiled on the occasion of the Vancouver Winter Olympics opening ceremonies on February 12. But you may not know – because you probably didn’t notice – how everything came together so quickly to get that single made. That project, under the direction of legendary producer Quincy Jones, has actually been months in planning – not because someone was particularly clairvoyant about the disaster about to come, but because it was originally intended as a fund-raiser to help Africa, just like the original one back in 1985.

Sorry, I’ve got to end up with some more bad news from the Handelsblatt/dpa article: A French geologist, working in the US at Purdue University, recently went on the airwaves of the Haitian broadcaster RFM to warn that “[n]obody should be lulled into a false security”: he says yet another quake hitting that region is likely in the near future, with a Richter-scale strength of up to 5.5.

                          

If you haven’t been keeping track, Saab is supposedly in line to die because GM is ready to pull the plug and shut it down: the mother company announced last Friday that it was ready to begin Saab’s “orderly wind-down” and named some liquidaton-partners it expects to hire to help with that. But not so fast: cars are still being produced at the plant in Trollhättan! They are new models, even! What is more, a take-over offer from the Dutch sports car-maker Spyker (actually, that company’s third such offer) was put forward last Friday. There is a similar offer outstanding from a consortium of the investment company Genii Capital (based in Luxembourg) and Formula 1 head Bernie Ecclestone, and also one from yet another consortium that includes former Swedish politician Jan Nygren and the former head of the German truck-maker MAN, Håkan Samuelsson. And GM has made it clear that it is still open to considering all such offers.

The union representing Saab workers are furious at the resulting uncertainty about the company’s future, calling the company’s behavior “inconsistent and shocking.” And then there’s a further rumor Steuer reports of Saab moving a factory to China to produce there the new 9-5 model and/or Buicks directly on behalf of General Motors.

What to believe, if anything? Steuer makes the sensible observation that the best thing to believe is the fact-on-the-ground, namely that a new model (namely that “9-5″ – maybe there even are plans to hire Dolly Parton as advertising spokeswoman?) is now starting production. So GM probably does not in fact plan to allow the company to shut down entirely just yet.

                          

That is of course the mostly widely-watched stock exchange index, which additionally serves as the basis of numerous index funds as well as derivatives traded on the Chicago exchanges. But lately, as Benders points out, it has been all messed up. Those that determine the make-up of the elite 30 companies that make up the Dow don’t like to change that very often; there have been only 27 changes since 1976, and no changes made at all in the periods Nov. 1999 – Apr. 2004 and Nov. 2005 – Feb. 2008. But such stability also can be bad: it’s only recently that GM, AIG, and Citigroup were removed from the Index, i.e. long after it was clear in all three cases that catastrophic misfortune (to give a charitable interpretation) together with substantial government intervention were making any objective valuation of their outstanding stock’s value impossible. GM had been part of the Dow since 1923; now the only company left of the original 12 (from the beginning in 1896) is General Electric, which itself is not doing so well these days either. (The three kicked-out were replaced by Kraft Foods, Cisco, and Travellers Corp.)

The Index is too volatile; it’s not volatile enough; but forget all that, boiled down to its essence Benders’ complaint against the Dow is simply that it is composed according to the decisions of the editor-in-chief of the Wall Street Journal. Here he has his own agenda, which is precisely to talk down the Dow and so talk up the DAX (or Deutscher Aktien IndeX, essentially the “Dow” or blue-chip index for the Frankfurt Stock Exchange). It’s true that the latter has had its composition changed 29 times already since it was created in 1988, so Benders is willing to call it “shameless” (schnöde) – but it’s at least also put together in a transparent way,* unlike the Dow which remains subject to the opaque and arbitrary whims of one particular editor.

Anyone in the know about the American securities markets has long known anyway that the Dow Jones Industrial Average inevitably gives a distorted picture of the state of the securities markets there. But Benders is living in his own fantasy-land – the one clearly marked “Off limits!” for serious business reporters of all stripes, German or otherwise – if he really believes that the DAX will take over the Dow’s place anytime soon as a closely-watched indicator. This issue transcends mere questions of the validity of one index’s composition versus another’s, in favor of larger issues like the world-wide impact of one country’s securities markets versus another’s. Ground-shifting changes along those lines in the future can certainly not be ruled out – no more than anyone should bet that the US dollar will remain the world’s reserve currency forever – but minor objections over one index’s “transparentness” versus that of some other index will hardly be the way that we all get there.

* Benders doesn’t specify in his article how the DAX is “more transparent,” but the claim is probably valid since it is automatically calculated from the current share-prices of whichever happen to be the 30 largest German companies in terms of order book volume and market capitalization.

                          

This will actually be the fifth round of such inter-Palestinian negotiations; unfortunately, as his article’s title reveals, El Husseini cannot hold out much hope for any progress in uniting the two factions this time, either. That’s too bad, since that would be a nice gift that Fatah leader (and current “Palestinian president”) Mahmoud Abbas could bring along when he himself visits Obama on May 28. More to the point, though, that coming-together is necessary in order to produce a single Palestinian negotiating team with the required political legitimacy to be able to sit down with Israel’s representatives to hammer out an agreement on some two-state solution to finally push the decades-long Israeli-Arab confrontation substantially closer to peace.

Oops, there’s a problem: that two-state solution, as El Husseini reminds us, is not accepted as something to be aimed for in at all by a couple of important parties here, namely the new Netanyahu government in Israel and by Hamas. Sure, it’s the solution prescribed by players outside the area – most importantly the Americans, but also the Europeans – and has been endorsed by Abbas. But Abbas is in a weak position these days; as El Husseini puts it, “President Abbas must . . . wage war against Hamas and against the dissolution-process in his own organization.” For one thing, he does not have a proper government in place there in the West Bank; the last one, headed by Salam Fayyad, resigned last March, and on 7 May Abbas told Fayyad to form a new one. But this move has run into resistance even from other Fatah politicians. (El Husseini’s article does not say why; it might have to do with the fact that the Palestinian Basic Law – their constitution – requires any new prime minister receive the approval of the Legislative Council, which itself is currently in limbo because, from the last election, Hamas holds the majority of seats in it.)

This seeming weakness on the part of Mahmoud Abbas merely reflects the deeper reality, according to El Husseini, of his relative unpopularity among his electorate. His real “constituency” has become the Americans and the Europeans, who provide him the funds that enables him to keep on governing – not that he has shown himself do be able to do anything about either the ever-increasing Israeli West Bank settlements or the barricades and checkpoints throughout that territory that make the lives of most Palestinians living there pure hell.

Abbas and his Fatah organization get no assistance from Israel, either. As El Husseini points out, if Abbas could show some sort of progress in negotiations with the Israelis, that would strengthen Fatah’s position significantly against Hamas. But it has none to show, and seems particularly unlikely to achieve any such progress with this new hard-line Israeli government. What we have instead in effect is a de facto Israel-Hamas alliance against any two-state solution, i.e. against any further progress towards Middle East peace. That is the riddle President Obama must contemplate during the series of important visits he has on his agenda in the near future.

                          

Note that the Die Zeit title is slightly inaccurate: it’s not really the US government, but rather the American mother company that is trying to insist that the German government take Opel off of its hands, for a nice price. The whole problem here, however, just as with GM’s American assets, is how to dispose of them once the whole concern is officially cast into bankruptcy in the near future, while actually keeping the firms operating in the meantime, i.e. still selling autos, with repair warranties that customers can have confidence in. Have no fear though, at least when it comes to Opel more than one interested party (including Fiat) has already made approaches to buy it. One could assume that that whole process might go somewhat more quickly and smoothly in Europe than in the US because of their greater separability of those assets from the rest of General Motors, stemming in the first place from geography. Still, there’s certainly not enough time to carry through a proper deal of that sort before bankruptcy happens, in two weeks’ time.

In the meantime, the German government would really not be left holding the bag with Opel, thank you very much. Instead, what it has in mind instead is a plan that Economy Minister Karl Theodor zu Guttenberg first announced last weekend, a Treuhand (“trust”) solution. In this scenario, it would not be the government but instead some (relatively) independent bank or consulting firm to which Opel shares would be assigned and whose task would be to find the best permanent buyer for them. According to both articles cited above, the leading candidates for that role are the international accounting/consulting firm PriceWaterhouseCoopers or the German publicly-run banking-group KfW (Kreditanstalt für Wiederaufbau). In fact, under this proposal whichever “trust” candidate is picked would be responsible for disposing of not only Opel, but also GM’s other European subsidiaries (i.e. Saab and Vauxhall) as well.

Even under this plan, Opel officials have made clear that their firm would require a big line of additional credit – “more than a billion euro” is what GM Europe head Carl-Peter Forster told the Frankfurther Allgemeine Zeitung – in order to remain a going concern. Much of that money is needed to get the production-lines ready to start making the new Astra model that is supposed to come out in the autumn. That money would be forthcoming either out of the KfW itself, or out of the Landesbanken (i.e. the government-sponsored banks) in those few German federal states where Opel facilities are located. Note that for the supplying of this money consideration is being given only to state-influenced banks; these days no private bank could be expected to go near any such a proposition involving the auto industry.

So zu Guttenberg has proposed this Treuhand solution, and Treuhand it is likely it will be. That may not be GM’s favorite course of action, but these days GM is playing with a very weak hand, especially in Germany where Opel has nowhere near the dominance of the national auto industry there as GM has in the US. A summit of relevant federal officials with Bundeskanzlerin Angela Merkel on this issue is to happen today. That doesn’t necessarily mean any sort of final decision, but it should move the whole process quite a bit forward.

UPDATE: This article from the German newsmagazine Focus reminds me that General Motors still has some powerful cards to play as it objects to the Treuhand solution for Opel preferred by the German government. The land Opel facilities in Germany are built upon, those facilities themselves, and all patents are in the name of GM, not Opel – and, in fact, are all now posted as collateral to various banks and to the US government. And, indeed, it seems that at that Thursday, 14 May German government “summit meeting” it was the GM representatives who were not willing to go along with the Treuhand plan.

That doesn’t mean that ways cannot be found to make it happen anyway. For that matter, as German Economy Minister zu Guttenberg also let slip in comments to the press, if nothing else can be made to work, then there would also be the option of an “orderly bankruptcy” of Opel (already the solution applied in the US to Chrysler, you’ll recall) as the means to taking things further to see whether the firm cannot be resurrected in some other form.

                          

That’s “Opel” as in “Adam Opel GmbH,” the German-based daughter auto-making concern of General Motors. As you can imagine, it’s currently in financial trouble; this past week it directed its own appeal for help to the German government (actually governments, see below). And so, in more-or-less mirror-image to the issue the US government is now having to confront, Germany is also now taking up the same dilemma: should its auto-makers be bailed out to save the many thousands of jobs dependent on them? Or would that be throwing only the first installment of massive monies to an industry that is anyway doomed with no future?

That debate has already fluctuated between “save the jobs” and “doomed anyway.” I am relying mainly on coverage of the issue from Handelsblatt, which earlier this week (on Tuesday) reported that the German federal authorities were inclined to be skeptical (Opel appeal for help to [German Chancellor Angela] Merkel finds no response). Put more precisely, according to that article those officials were content with pointing to various measures that were already in the pipeline to help the German auto industry and telling Opel that it should be happy enough with them. These mainly include €40 billion in loans that are supposed to come to the German automotive sector from the European Investment Bank to promote innovation, something that is supposed to be approved at a meeting next month, but also an additional €15 credit program as well as a lowering of the sales taxes in connection with the purchase of new vehicles.

But that is apparently not enough, especially not for Opel, which the German weekly magazine Focus is reporting has a financial shortfall of some €2 billion. And it’s clear that the tide has turned and German government officials have now relented and are willing to consider further measures – after all, that’s the Finance Minister himself, Steinbrück, along with Foreign Minister Frank-Walter Steinmeier, who will be holding this “summit” shortly with the top management of the German auto firms together with labor representatives. (Why is the foreign minister involved in this domestic matter? For the simple reason that Steinmeier is at the same time head of his party, the SPD, which makes up one-half of the “grand coalition” now in power in Germany, and he is also the designated Chancellor-candidate for the nationwide elections scheduled there for next year.)

Federal Turn-Around

Why the turn-around? Well, Germany is a federal state just like the USA, i.e. made out of component states with their own governments, budgets, and responsibilities. (It was the Americans who made it one when they helped to rebuild it after WWII; it had not really been a federal state before.) Certain of the states were ready to show much more alarm at the prospect of Opel going bust than the federal government was. These were naturally where Opel mainly has its plants and so is the source of the most employment, tax revenues, and the like, namely Hessen, Nordrhein-Westfalen, Rheinland-Pfalz (all of the preceding are in the old West Germany) and Thüringen. As Handelsblatt again reported (States prepare blitz-rescue for Opel), these states showed themselves ready to react to Opel’s plight last week even as federal officials did not. It was in fact Hesse that took the lead – understandable, since Opel seem to have the greatest presence in that Bundesland (as a German “state” is called), although it is also surprising because in Roland Koch the state has a truly “lame-duck” governor (German: Ministerpräsident – Hesse’s current government travails are a long story I can’t deal with here). Nonetheless, Koch has already pledged half-a-billion euros from his state government’s budget as a contribution to Opel, all while publicly declaring “I assume that there is no one who doesn’t want to help.”

Actually, of course, there were some disinclined to help, namely at the federal level, but it’s clear that this pressure from the Bundesländer has turned the situation around. It was probably of decisive importance that they seem ready to put their own money where their mouths are. This is in sharp contrast to the American situation, and in particular to the analogous pressure on Washington for an auto bailout from the American states. In the lead on this is Michigan Democrat Governor Jennifer Granholm who, although she is prominent these days as a member of Barack Obama’s economic transition team, has no state money of her own to bring to the table since all states – but, one can expect, especially Michigan – are suffering these days fiscally from a recession-induced fall in tax-revenues collected. (Sorry, I’m not familiar enough with the details of German federal financing to know why that does not seem to apply in equal measure to the German Bundesländer.)

The answer in Germany, then, seems clear: yes, a bailout is coming, only the details remain to be worked out starting with the upcoming “summit.” (By the way, while Steinbrück had that set in his calendar for next Tuesday, 18 November, that was before Steinmeier got involved, and he wants it to take place the day before. Remember, Steinmeier outranks Steinbrück, if not in terms of their places in the German federal government, then in terms of their common political party, the SPD.) That does not mean that such a bailout is the “right answer.” But the way things are proceeding at different speeds on the separate sides of the Atlantic, it seems that the Americans will at least have the opportunity to see the initial effects of such a bailout as they consider whether to do the same (assuming progress on that in the US is only possible once Barack Obama comes into office).

                          

In all, it’s an enormous ball of fluff, the groupie-tone of which you can appreciate by just taking a look at the accompanying video: maybe you won’t be able to understand the German, but that doesn’t matter so much, as you can rest assured that what is being expressed is the usual stuff of “He was an amazing man to meet!” and “I still think it was only a dream!” It’s obvious that the Economist’s linguistic and analytical talents would better have been employed addressing reaction to Obama’s Berlin visit and his speech coming from an actual representative of the serious German press – could it be that the Bild story was irresistible because it allowed a follow-on mention (check it out, it’s also right there in the Certain Ideas of Europe piece) of Obama’s picture right there on the Bild’s front cover above the topless-girl-of-the-day? Obama smiling and waving just above the fold; topless Claudia on her knees and looking towards the camera seductively just below the fold; the New Republic’s weblog The Plank thoughtfully reproduces that front page shot here. (To be fair, this is of course hardly the only piece the Bild Zeitung delivers about Obama’s visit. Then again: it’s only the Bild Zeitung, whose very name means “Picture Newspaper,” thereby making clear where its editorial priorities lie.)

Obama groupie-love, topless model: how very . . . remarkable! (*Sniff*) But never mind, beloved EuroSavant audience, let’s go make that ramble through (some of) the serious German press that, for whatever reason, our MSM colleagues at the Economist eschewed.

Stuck in Berlin’s “Front-Line Myth”

At the Siegessäule

At the peak of the serious German press – actually a weekly newspaper with a higher degree of commentary in its pieces than sheer reporting, along the lines of the Economist itself – is Die Zeit, so let’s start with Yes, we can hope! (title in English), by Christoph Seils. “The party is over, the Superstar has left,” he begins. Now it is the time for a level-headed assessment of what this was really all about. Yes, he is an impressive speaker, who calmly delivered a quite capable speech in front of more than 200,000 cheering onlookers. Then again, in that speech he clung to what Seils calls “the front-line myth” that Americans seem to continue to hold about Berlin, but which is not true anymore at all. Berlin is not anymore any focal-point of ideological confrontation and by no means recognizes itself as such; rather, it’s the city of the Love Parade, for Heaven’s sake, which used to wind its crazy, techno-dancing way past the very Siegessäule before which Obama spoke! (Granted, the Love Parade now has started to be held elsewhere, after Berlin started to tire of dealing with the yearly hordes of people and their trash: for 2008 it just occurred last Saturday, 19 July, in the western German city of Dortmund.)

As you would expect, Seils does get past the hype to treat the unavoidable fact that, for all the greater cooperation and listening that an Obama administration will offer Europe, it also will demand more of its European allies and will be, with its wide smile, its seeming reasonableness, and thus its marked contrast to the widely-detested Bush regime, much harder to refuse. From the very structure of and statements eminating from this overseas trip, it is crystal-clear that at the top of that list of demands from our NATO allies will be a greater devotion of men and resources to Afghanistan to match what President Obama will be ready to commit. Seils’ article excels in that it depicts the problem that will cause rather starkly: involvement in Afghanistan – any involvement in all, much less the troops and money that are already going there – is widely unpopular in Germany. The meme of “why are we there in the first place?” is ever-present in public discussion. Still, again, that smiling President Obama will want even more. If only those predominantly youngsters clapping and cheering in front of the Senator’s speaker’s podium yesterday evening could realize that – they might change their tune!

He also reminds them – reminds all his readers – that, for all their rapture, it is not they or any Germans who will decide whether Barack Obama becomes the next US president, but rather American voters. And that race still seems very close.

Not to Gerhard Spörl of Der Spiegel, it seems, whose contribution to the post-Berlin analysis is No. 44 Has Spoken. Yeah, this one is pretty hagiographic – somewhat better than the “I met him in the gym!” Bild Zeitung piece, but not by much. Anyway, you can read it for yourself since Der Spiegel “put it on their English-language website (which, you’ll see there, has it’s own version of the George W. Bush’s-remaining-time-in-office countdown!).

Here, Have Some Bitter Truth

Columnist Thomas Hanke of the business newspaper Handelsblatt seemingly witnessed nothing but hard reality in Obama’s words, as he makes clear in his piece Cold Fervor. The references to the Berlin blockader were not just there to make everyone feel good; the decades-long confrontation in the city with the Soviets was brought up as an analogy to the severe tests which the West again faces today, especially in Afghanistan. In Hanke’s eyes, Obama in his speech was simply serving up the “bitter truth” that hard work and sacrifice lie ahead of America and its allies, and the replacement of Bush in the White House with another president is not going to change any of that. There can be no more illusions; Europeans will have to join the US in stepping up and taking responsibility for addressing the world’s problems as well.

Writing in the Süddeutsche Zeitung (Yes He Can), Reymer Klüver both marvels at and dismisses Obama’s Berlin speech and his conduct on this overseas trip in general. On the one hand, the tour has been tremendously valuable to him in that it has demonstrated that he is definitely presidential material. The increasing influence of policy steps he has long advocated – both diplomatic discussions with Iran and a timetable for withdrawal of US troops from Iraq – has showcased his judgment.

Then again, the appearance in Berlin might have come at considerable ultimate cost to Germany – “Obama will be expensive for Germany,” Klüver writes. This is naturally because of the “shared sacrifices” that he made clear in his speech that he will be demanding of America’s allies. Still, one can still doubt how much of this will actually translate into concrete action when/if he becomes president. One must remember that 1) The real audience for the speech was American voters, not those who gathered in the Tiergarten to actually hear it, and 2) Obama has already displayed a capacity for abandoning positions he once held in the past (e.g. opposition to free trade/NAFTA), so that should be kept in mind.

Obama to Shove More Burdens Onto Allies?

Also on the Süddeutsche Zeitung site there is currently an interview, conducted by Thomas Denkler, with an “America-expert” from the German Society for External Politics, one Josef Braml (“Obama will not walk on water”). He makes some good points, such as linking Obama’s call for shared sacrifice with the orientation of his speech to the American electorate: what with the economic troubles in which the US now finds itself, interest has grown (especially among Democratic Party constituents) in cutting back on some of the money the country spends for its overseas engagements, by transferring some of that burden onto the allies, in order to have more financial resources to devote to problems at home. Also, even if he is elected president with Democratic majorities in both houses of Congress, Obama can still not expect easy going because of the ideological divisions that persist even within his own party – over free trade, for example, and questions of Homeland Security.

The Frankfurther Rundschau is also a serious German paper, from the country’s fifth-largest city and financial capital. In his analysis The World Becomes Young), FR columnist Harry Nutt has a curious take on Obama’s Berlin visit. He estimates that half of the 200,000 who gathered to hear the Senator live were under the age of 20. What is more, whether the Obama campaign cottoned on to this or not when they were persuaded to accept the Siegessäule as an alternate venue for the speech they wanted to schedule, that monument and the enormous circular square in which it is located (the Großer Stern) does not really anymore symbolize to Germans anything out of their history, presumably because anything it might have once symbolized was entirely discredited in the wake of the Second World War. Rather, (and as above), if you hit a German with Siegessäule! in a word-association test his response will probably be “Love Parade!”, and/or the “fan-miles” that were set up there on the boulevards between that monument and the Reichstag/Brandenburg Gate for swarms of football fans from all over the world during the World Cup in 2006, which Germany hosted, as well as the recent European Championship.

So the audience and the venue itself was all about young people, young culture; Nutt chides Obama that the numerous references he made to the Berlin Airlift were entirely without effect – that is just something out of some history book the members of the audience have been required to study. Still, quite an impressive mass of them showed up to hear the speech, and they proved loud and enthusiastic during it; what were they doing there, then? Firstly, they were looking for something as unlike as they could get to George W. Bush, something that could make them believe in politics again. But they were therefore also looking for an effective new politics, that can get results: “It is the hope for a Realpolitik, that nonetheless can be paired with Passion,” as Nutt puts it.

Amero-Centric

On the other hand, FR contributor Marcia Pally didn’t know about young-vs.-old, but all that she saw filling the square in front of Obama – presumably being present there herself – was Americans (Ich bin eine Berlinerin – Berlinerin merely meaning “female Berliner”). But that was somehow appropriate, anyway: after all, the speech was really meant for the American electorate back home, one big laundry-list of what Obama’s “change” is supposed to mean: putting in order the Iraq problem, as well as Afghanistan, Iran, Israel/Palestine, AIDS, climate change, the spread of nuclear weapons, the gulf between rich and poor, and the democratic deficit.

That’s quite a list. And Obama has also come to Europe to let the Europeans know that, if he is president, they will be listened to again. But why does Europe need the US for that? Most people, if they find that absolutely no one is listening to them, simply hire a psychiatrist. And why can’t Europe develop its own approaches to all those problems Obama is promising to bring “change” to? Those are good points, but especially surprising given their source, for Pally’s article itself had to be translated for publication in the FR, from English, for she is a professor who regularly teaches at NYU and a permanent Fellow of the New York Institute for the Humanities, who has just been recently in Berlin as an academic fellow at the Wissenschaftskolleg zu Berlin.

Finally to the Financial Times Deutschland, and to a non-bylined editorial (thus representing the views of the editorial board collectively) that also looks ahead to the cold reality that is sure to come after the smiles, cheers and handshakes are long in the past: Hangover After the Intoxication. For what a President Obama has in mind for the world can be seen by the very itinerary of this overseas trip: first to Afghanistan and the Middle East, to take stock of the problems, and then to Europe, to seek help in their solutions. But it didn’t take this trip to enlighten German politicians about what President Obama would ask of them: it has been clear for some time that he would be after both a greater troop and financial commitment to Afghanistan (including changing their rules of engagement so that they are allowed to venture where things are actually dangerous, namely the South of the country), even as they seem to want to treat the American as some “cuddly stuffed animal,” that “says conciliatory phrases when you shake his hand.” But its the German voters, who don’t find it in their job-description to keep track of such things so closely, who could find themselves disappointed in the end, when “Obama’s new America strives after the old objectives” but turns out to be that much harder to say “no” to, precisely because of his great contrast with George W. Bush.

One interesting point the editors bring up: just as a notional Obama administration will be getting up and running in 2009, so will Germany enter its own campaign ahead of national elections in that year. Especially when Germans are running for re-election, they become very reluctant to being depicted as mere American “poodles,” so to say. (The word belongs to the British, not the Germans: it’s the idea I’m after here.) Those so eager to partake of the Obama-aura yeterday could well find themselves in the end rooting for John McCain – a figure much easier to say “no” to.