The ruling is “a clear rejection of eurobonds”, said Otto Fricke, finance spokesman for the Free Democrats (FDP) in the governing coalition.

Above all, the court ruled that the Bundestag’s fiscal sovereignty is the foundation of German democracy and that Article 38 of the Basic Law prohibits transfer of these prerogatives to “supra-national bodies”.

By stating that there can be no further bail-outs for the eurozone without the prior approval of the Bundestag’s budget committee, the court has thrown a spanner in the works and rendered the EFSF almost unworkable.

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The decision seemed to place fewer restrictions than some had expected on Chancellor Angela Merkel’s ability to react to the European debt crisis, while the high public standing of the court should lend broader legitimacy to government efforts to shore up the European currency. But, some analysts said, the ruling could hamper Mrs. Merkel’s power to take quick measures.

The court’s president, Andreas Vosskuhle, said the ruling did not represent a “blank check for additional rescue packages.”

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The court’s judgment, highly anticipated in European capitals and financial markets, will settle whether Chancellor Angela Merkel’s government breached the German people’s property rights in agreeing to the initial bailout of Greece in 2010.

The court also is due to rule on whether the German government should have asked the country’s parliament before taking part in the bailouts of Ireland and Portugal, as well as on the legality of the European Central Bank’s purchases of government bonds.

Legal analysts say the court is unlikely to rule that aid for euro-zone partners is unconstitutional, but that the judges could make future loan packages for euro countries subject to approval by Germany’s lower house of parliament, the Bundestag.

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Muslims in Germany have been accused of many things, from threatening the feminist cause to trying to destroy German society through “demographic jihad.” It isn’t the Muslims that are the problem, however, but rather our obsession with Islam.

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No amount of jaw-jawing from the ECB (or from the G-7, which yesterday put out an odd statement calling the rise in euro-zone bond yields not “warranted”) can make investors buy Italian debt. Mr. Trichet continues to act as if the markets are having an attack of the vapors, from which they’ll recover presently. But no rational person or institution is going to start buying sovereign debt from heavily indebted, stagnant, deficit-running countries as if the past 15 months had never happened. The lamp has been rubbed, the genie has escaped, and no amount of un-rubbing will put him back in the lamp.

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Behind the paralysis in Washington and prevarication in Berlin lies a troubling thought. Political systems in thrall to 24-hour rolling news have lost the capacity to make difficult choices. Globalisation imposes wrenching change and simultaneously saps the ability of governments to adapt. Politicians find it easier to argue about taxing the rich or cutting Medicare and about central bank bond purchases versus default than to confront the consequences for western societies of the profound upheaval in the global economy.

So it is tempting to say all is lost ”“ that a political and economic model built on western primacy is cracking under the strain of the shifting balance of international advantage. The American dream and European welfare state are bending to the competitive winds of globalisation.

Tempting but premature. It is too early to despair. What makes the crises in Washington and Europe so infuriating is the fact that, for all they demand hard decisions, they are susceptible to political solution. The missing ingredient is leadership.

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Three years ago, the collapse of Lehman Brothers, the US investment bank, triggered a domino effect that had calamitous consequences for the world. No one knew how many institutions had lent money to Lehman, or how many might be pulled down with the bank. Fear spiralled through the financial markets and central banks worked overtime to prop dominoes up. The result was a painful recession.

This time, some of the dominoes are nations. Greek debt is about three times the size of that of Lehman Brothers. Around half of it is held by foreign investors, who will be hit if Greece defaults. Add in Spain and Italy, which represent about 28 per cent of eurozone GDP, and the numbers get scary. Add in a leadership vacuum, and investors start asking why they should keep lending to countries such as Italy that are troubled but still solvent…

That Europe has reached its Lehman moment is substantially the fault of its myopic and reckless power elite.

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Five years ago, I was among those who argued that the probability of a collapse of the eurozone was close to zero. Last year, I wrote it was no longer trivial, but small. The odds have risen steadily since, not because of the crisis itself, but the political response. I now would put the odds of a break-up of the eurozone at 50:50. This is not because I doubt the pledge by the European Council to do whatever it takes to save the euro but because I fear it has left things too late. The council may be willing but it will not be able to deliver. As I argued last week, a eurozone bond is the only solution to the crisis. But this gets progressively more expensive, and politically less realistic, once bond spreads of large countries widen.

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The United States is in the World Cup final for the first time since it last won the title in 1999, and once again, it was Abby Wambach coming up big in a 3-1 victory over France.

Wambach broke a tense tie in the 79th minute Wednesday with a monstrous header ”” what else? ”” off of a Lauren Cheney corner kick. Cheney delivered the ball perfectly to the far post, and the 5-foot-11 forward soared over the scrum and pushed the ball past French goalkeeper Berangere Sapowicz. Wambach let out a scream and did a sliding sprint into the corner, where she was mobbed by her teammates.

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Wow.

Japan have recorded a famous 1-0 extra-time win to eliminate reigning champions and host nation Germany from the 2011 FIFA Women’s World Cupâ„¢ and reach the semi-finals for the first time.

Substitute Karina Maruyama scored the decisive goal on 108 minutes as Germany suffered a first defeat for 16 matches, dating back to the quarter-final stage at USA 1999. Japan will now face the winner of Sunday’s semi-final between Sweden and Australia.

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The reason a currency union needs a political union is simple. The centre has to have some way of stopping parts of the union from borrowing too much in the common currency at the common interest rate. If some borrow too much they are free riders on the backs of the more prudent areas.

If they go on borrowing too much they undermine the credit rating of the whole area, and force up the cost of borrowing for the prudent parts. To achieve discipline, the centre also needs to send subsidies and payments to the poorer parts, to compensate them for their inability to devalue to price themselves back into a competitive position.

Today the single currency system is suffering from the double stresses of too much borrowing by countries such as Greece and Portugal, who have spent too much and raised too little in tax, and from the need of countries like Ireland to bail out their overstretched banking systems….

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The European Union seems to have adopted a new rule: if a plan is not working, stick to it….But their strategy of denial””refusing to accept that Greece cannot pay its debts””has become untenable…

An orderly restructuring [for which the Economist advocates] would be risky. Doing it now would crystallise losses for banks and taxpayers across Europe. Nor would it, by itself, right Greece. The country’s economy is in deep recession and it is running a primary budget deficit (ie, before interest payments). Even if Greece restructures its debt and embraces the reforms demanded by the EU and IMF, it will need outside support for some years. That is bound to bring more fiscal-policy control from Brussels, turning the euro zone into a more politically integrated club. Even if that need not mean a superstate with its own finance ministry, the EU’s leaders have not started to explain the likely ramifications of all this to voters. But at least Greece and the markets would have a plan with a chance of working.

No matter what fictions they concoct this week, the euro zone’s leaders will sooner or later face a choice between three options: massive transfers to Greece that would infuriate other Europeans; a disorderly default that destabilises markets and threatens the European project; or an orderly debt restructuring. This last option would entail a long period of external support for Greece, greater political union and a debate about the institutions Europe would then need. But it is the best way out for Greece and the euro. That option will not be available for much longer. Europe’s leaders must grab it while they can.

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Investors are withdrawing cash from money market funds heavily exposed to short-term debt issued by European banks out of fear that a Greek default could spark contagion across the region’s financial sector.

At the same time there is increasing reluctance among US banks to lend to their European counterparts in the past two weeks because of growing worries over Greece, according to brokers and bank traders.

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Check it out.

The new plan’s biggest shortcoming, however, is its attitude to Greece’s debt. The original rescue plan assumed that, starting in 2012, Greece would issue new bonds to pay off maturing ones. With such market access now out of the question, the new bail-out envisages more loans from the EU and IMF, along with some “voluntary” participation by private bondholders. Germany would like the maturities of all Greek bonds to be stretched by seven years. The European Central Bank has long resisted any such debt “reprofiling”, though it seems to be warming towards an informal promise by some creditors, such as Greek banks, to buy more government bonds when their existing ones mature.

The practicality of such an informal promise is doubtful. And it won’t solve the debt problem. When the new plan ends Greece will still owe more than it can possibly pay. More of that debt will be to official creditors, especially if the private bondholders play only a token role now. Restructuring at that point will be more costly for other governments and the IMF.

The rescuers think buying time reduces the risk of contagion from a Greek debt restructuring to other euro-zone countries. But the pall of an unsolved Greek mess will continue to hang over the euro zone, just as it has done for the past year…

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France remains steadfast in its opposition to a restructuring of Greece’s debt under any terms, the government’s spokesman said on Wednesday, showing a divergence of opinion with Berlin.

German Finance Minister Wolfgang Schaeuble raised the prospect of a restructuring, saying in a letter to EU partners this week that private bondholders should bear some of the burden of a debt relief deal, preferably via a bond swap and a rescheduling.

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Here, the students witnessed the establishment of a German-Polish-Russian forum designed to encourage a rapprochement among three countries with fundamentally different historical narratives of World War II.

Any such process would ultimately mean Russia confronting its past, particularly Stalinist crimes and the gulags, and reassessing its role as victim and victor during and after World War II. It would also mean Russia embracing the European idea of dealing with memory and the past, now so much a part of the European identity.

“Being European is about being aware of what we did,” said Ivan Krastev, historian and chairman of the Center for Liberal Strategies in Sofia.

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Keeping debt under control, Merkel said in a speech at an event held by her party, the conservative Christian Democratic Union, in the western German town of Meschede, isn’t the only priority. “It is also important that people in countries like Greece, Spain and Portugal are not able to retire earlier than in Germany — that everyone exerts themselves more or less equally. That is important.”

She added: “We can’t have a common currency where some get lots of vacation time and others very little. That won’t work in the long term.”

There are indeed significant differences between retirement ages in the two countries. Greece announced reforms to its pension system in early 2010 aimed at reducing early retirement and raising the average age of retirement to 63. Incentives to keep workers in the labor market beyond 65 have likewise been adopted. Germany voted in 2007 to raise the retirement age from 65 to 67 over the next several years.

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A different picture of the man, and the period, has begun to circulate. Bild, the German tabloid, having recently forced the BND through the courts to release a few files, uncovered an index card from 1952 that made clear that West German intelligence officials already knew Eichmann was living in Argentina. The card listed his alias there, or something close to it, and a contact who edited a well-known Nazi magazine in Buenos Aires, Der Weg.

West German authorities had claimed they had no clue where Eichmann went until the Israelis found him. Then in 2006 declassified C.I.A. documents showed they knew as early as 1956. Now it turns out they knew even earlier. Considering that Eichmann’s wife and children settled in Argentina in 1952 ”” living openly with Eichmann under their own names, in a house that was under his name ”” it seems remarkable today that authorities got away with claiming ignorance for so long.

Germans reacted to the Bild article with a familiar shake of the head that, here, implies not a lack of concern but stoic resignation. The bigger kerfuffle, though, has been around the more than 4,000 pages of undisclosed intelligence about Eichmann.

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Christianity.com:An Evening with Eric Metaxas from ChristianityDotCom on Vimeo.

Watch it all (and careful blog followers may note where it took place)–KSH.

In the spring of 1933, Bonhoeffer was declaring it the duty of the church to stand up for the Jews. This would have seemed radical to even staunch allies, especially since the Jews had not begun to suffer the horrors they would suffer in a few years. Bonhoeffer’s three conclusions””that the church must question the state, help the state’s victims, and work against the state, if necessary””were too much for almost everyone. But for him they were inescapable. In time, he would do all three.

Eric Metaxas, Bonhoeffer: Pastor, Martyr, Prophet, Spy ( Nashville: Thomas Nelson, 2010), p.155

This is what we mean by cheap grace, the grace which amounts to the justification of sin without the justification of the repentant sinner who departs from sin and from whom sin departs. Cheap grace is not the kind of forgiveness of sin which frees us from the toils of sin. Cheap grace is the grace we bestow on ourselves.

Cheap grace is the preaching of forgiveness without requiring repentance, baptism without Church discipline, Communion without confession, absolution without contrition. Cheap grace is grace without discipleship, grace without the Cross, grace without Jesus Christ, living and incarnate.

Costly grace is the treasure hidden in the field; for the sake of it a man will gladly go and sell all that he has. It is the pearl of great price to buy which the merchant will sell all his goods. It is the kingly rule of Christ, for whose sake a man will pluck out the eye which causes him to stumble, it is the call of Jesus Christ at which the disciple leaves his nets and follows Him.

Costly grace is the gospel which must be sought again and again, the gift which must be asked for, the door at which a man must knock.

Such grace is costly because it calls us to follow, and it is grace because it calls us to follow Jesus Christ. It is costly because it costs a man his life, and it is grace because it gives a man the only true life. It is costly because it condemns sin and grace because it justifies the sinner. Above all, it is costly because it cost God the life of His son: ‘ye were bought at a price,’ and what has cost God much cannot be cheap for us. Above all, it is grace because God did not reckon His Son too dear a price to pay for our life, but delivered Him up for us. Costly grace is the Incarnation of God.

–Dietrich Bonhoeffer, The Cost of Discipleship

Precisely because of our attitude to the state, the conversation here must be completely honest, for the sake of Jesus Christ and the ecumenical cause. We must make it clear””fearful as it is””that the time is very near when we shall have to decide between National Socialism and Christianity. It may be fearfully hard and difficult for us all, but we must get right to the root of things, with open Christian speaking and no diplomacy. And in prayer together we will find the way. I feel that a resolution ought to be framed””all evasion is useless. And if the World Alliance in Germany is then dissolved””well and good, at least we will have borne witness that we were at fault. Better that than to go on vegetating in this untruthful way. Only complete truth and truthfulness will help us now.

–Dietrich Bonhoeffer as quoted in No Rusty Swords, my emphasis

Bonheoffer’s life and death belong to the annals of Christian martyrdom”¦his life and death have given us great hope for the future. He has set a model for a new type of true leadership inspired by the gospel, daily ready for martyrdom and imbued by a new spirit of Christian humanism and a creative sense of civic duty. The victory which he has won for us all, a conquest never to be undone, of love, light and liberty.

–Gerhard Leibholz (1901-1982), Bonhoeffer’s brother in law

Chancellor Angela Merkel has responded to her party’s stinging election defeat on Sunday by pledging to speed up Germany’s exit from nuclear power.

“My view of nuclear energy has been changed by the events in Japan,” she said on Monday after a meeting of her Christian Democratic Union (CDU) to discuss the loss of the state of Baden-Württemberg, the party’s stronghold for 58 years, to the resurgent Green Party. “I have learned a lesson from what happened in Japan.”

The Greens, vehement opponents of nuclear power, surged in the rich southwestern state on a wave of public fear of nuclear power following the Fukushima accident. The party will rule the state in a coalition with the center-left Social Democratic Party (SPD).

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Chancellor Angela Merkel’s conservatives lost power in their German heartland after nearly six decades, initial poll results showed Sunday, with the Greens likely to lead their first state government.

Merkel’s Christian Democrats (CDU) have ruled Baden-Wuerttemberg since 1953, but anger over her nuclear policy in light of the Japan crisis as well as decisions on Libya and the euro drove away voters in the run-up to the poll.

The anti-nuclear Greens claimed about 24 percent of the vote — about 12 point higher than five years ago — and were likely to form a coalition with the Social Democrats, who garnered about 23 percent in the rich state.

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A favorite pastime of Internet users is to share their location: services like Google Latitude can inform friends when you are nearby; another, Foursquare, has turned reporting these updates into a game.

But as a German Green party politician, Malte Spitz, recently learned, we are already continually being tracked whether we volunteer to be or not. Cellphone companies do not typically divulge how much information they collect, so Mr. Spitz went to court to find out exactly what his cellphone company, Deutsche Telekom, knew about his whereabouts.

The results were astounding. In a six-month period ”” from Aug 31, 2009, to Feb. 28, 2010, Deutsche Telekom had recorded and saved his longitude and latitude coordinates more than 35,000 times. It traced him from a train on the way to Erlangen at the start through to that last night, when he was home in Berlin.

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The voice of the tempter does not come out of an abyss only recognized as ”˜Hell’. It completely conceals its origin. It is suddenly near me and speaks to me. In paradise it is the serpent–quite plainly a creature of God””through whom the tempter speaks to Eve. Indeed there is no sign of the origin of the tempter in fire and brimstone. The denial of the origin belongs to the essence of the seducer.

–Dietrich Bonhoeffer, Creation and Fall: Temptation (New York: Simon and Schuster, 1997 ed. of the 1957 tr. of the 1955 German original), p.116 (emphasis mine)

The attack on a busload of U.S. Air Force troops at Frankfurt airport that killed two is being investigated as a possible act of Islamic terrorism, German federal prosecutors said Thursday.

Two airmen were also wounded late Wednesday when a man identified as a 21-year-old ethnic Albanian from Kosovo fired on the servicemen at close range. His family said the young man worked at Frankfurt airport and was a devout Muslim.

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