ZIRP minus driving a wedge:
On Friday evening in Kronberg near Frankfurt, Schaeuble received the Wolfram-Engels prize from the Stiftung Marktwirtschaft, a foundation, which according to its website, stands for “Ordoliberal thinking and action”. This was a group receptive to Schaeuble’s message and he didn’t disappoint. In comments that were picked up by a Dow Jones reporter, Schaeuble went so far as to blame Draghi for the rise of the Alternative for Germany (AfD), a new anti-immigration, anti-euro party that surged into three regional parliaments last month with stunningly strong scores.
What is behind this rhetorical escalation? It appears to be tied to growing concerns in Berlin about the knock-on effects of rock-bottom interest rates on pensioners. Another article in Der Spiegel said Chancellor Angela Merkel and Bavarian leader Horst Seehofer, worried about rising risks of “Altersarmut” (poverty among the elderly), are planning to make more generous pensions a key promise in the 2017 election campaign. The fear is that the AfD could seize on the issue of pensions to build on their recent gains. Suddenly, it seems, ECB policy has become a major political risk for the governing parties.
A house divided... AGAINST ITSELF... cannot stand.