Now were Germany or Switzerland to impose capital controls to stem a stampede to buy the D-Mark or Swiss franc (once created) would stir things up!

Submitted by Tyler Durden on 12/10/2011

Even as Eurozone leaders attempted to instill some meager sense of accomplishment following the latest (but certainly not last) Euro summit culminating with yet another 7-page term sheet which achieved absolutely nothing, and in fact succeeded in alienating the UK even more, the real game continues behind the scenes. And it is a game which the euro looks set to lose. As Bloomberg reports, in the aftermath of the Telegraph's latest report confirming what has been said here all about the collateral crunch in Europe, Europe's CEO are now actively preparing for the worst case outcome: the end of the Euro (despite UBS' and other
banks' repeated calls that such an event would result in an end of the world). To wit: "Grupo Gowex (GOW), a Spanish provider of Wi-Fi wireless services, is moving funds to Germany because it expects Spain to exit the euro. German machinery maker GEA Group AG is setting maximum amounts held at any one bank. “I don’t trust Spain will remain in the euro zone,” said Jenaro Garcia, founder and chief executive officer of Madrid- based Grupo Gowex, which provides Wi-Fi access in 15 countries.

“We moved our cash and deposits to Germany because Spain will come back to the peseta"... Contingency planning for an unraveling of the currency involves cutting investment, moving money to Germany, transferring headquarters to northern Europe from southern, and even going out of business." And to all the chatterboxes on CNBC repeating ad inf that a Eurozone collapse would be "manageable" here is a person who actually knows what he is talking about: "“How do you control an explosion in a controlled way?”

Fiat SpA (F) Chief Executive Officer Sergio Marchionne told reporters in Brussels on Dec. 2. “That’s a contradiction in terms. This will be an implosion of some size with potentially disastrous consequences."

He is right, and while the outcome is certain, it will not stop Europe's financial leader Germany from intervening in an attempt to prevent a surge in Deutsche Marks once the currency returns, and will likely set up capital control measures - that last bastion to every failing monetary system - to halt what is sure to be a record inflow of post-collapse DEM appreciating capital.

From Bloomberg:

The Bundesbank, Germany’s central bank, registered capital inflows of 11.3 billion euros ($15 billion) from non-banks in September, according to the breakdown of its current account published Nov. 9. That helped transform a deficit of 47.3 billion euros in Germany’s balance of other capital flows in August to a surplus of 700 million euros in September.

In another bid to end the debt crisis, European leaders added 200 billion euros to their warchest and tightened anti- deficit rules in what they called a “fiscal compact” at a meeting in Brussels. European stocks dropped and the euro was little changed as the plan disappointed some investors.

And confirming the case for capital controls, is Handelsblatt which reports that Switzerland is preparing contingency plans in the event that the €-crisis escalates.

The government would oppose a flight to the Swiss franc. In this context, a working group is examining and negative interest rates and capital controls, the Swiss Finance Minister Eveline Widmer-Schlumpf said in Parliament yesterday. At negative interest rates of foreign assets in CHF are subject to a penalty tax.

"We are certainly prepared for possible alternatives," Widmer-Schlumpf said on questions of deputies, the government would like to respond. To capital controls or negative interest rates, she said: "These are questions which are examined in this Task Force on the franc strength."

But just like any other centrally panned intervention this one too shall fail. What is more important, is that now that the concept of a EUR end is tangible, it will likely become a self-fulfilling prophecy: ... Finish reading @ZeroHedge

Some Friday afternoon polls...9-30-2011

Over at Open Europe, we admit to be poring over EU-related polls from the German-speaking world, like a German Commission offical over the Greek accounts.So here's some polling for a Friday afternoon.

A survey for Focus published today shows that 50% of Germans would be willing to exchange the euro and get the D-Mark back, while 48% preferred holding on to the euro. A year ago, 50% wanted to keep the euro, while 47% wanted a return to the D-mark.

Interestingly, 40% of the respondents stated that they were “sceptical” about Germany's EU membership - which seems like a surprisingly large share. 46% stated to have "personally" benefited from Germany’s EU membership, but, mirroring the "sceptic" share, a full 40% said that they had not personally benefited from Germany's membership.

Meanwhile, according to a survey conducted by the Austrian Gesellschaft für Europapolitik, only 37% of the Austrian people think Austria has benefited from the Single Currency, whereas 48% believe it hasn't been beneficial. While, in answer to the question: should the EU have a direct influence on national budgetary policy? 58% voted no, compared to 33% yes.

Additionally, 30% referred to a ‘United States of Europe’ as a ‘fitting model’ for the EU, while 50% disagreed.

A bit of a mixed bag then, but some clear signs of growing fears over the state of the eurozone in these core european electorates. Now the key question is, if and when this feeling will feed through to election results, we for one are waiting with bated breath. Source @OpenEuropeBlog