Germany Acts Alone to Protect the Euro and Big Banks Against Speculators

If Germany’s efforts to rein in speculation in European markets were meant to surprise investors, they succeeded — just not quite in the way officials in Berlin might have intended.
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Tobias Schwarz/Reuters

Axel Weber, right, president of Germany's central bank, and Jochen Sanio, head of BaFin, which regulates its financial markets. BaFin banned the naked short-selling of some stocks and bonds.

On Wednesday, the government’s partial ban on so-called naked short-selling took effect, as part of Berlin’s effort to protect its biggest financial institutions and the euro currency from investors who have been betting against them.

Coinciding with the new rule, Chancellor Angela Merkel, whose rhetoric has intensified as the euro zone’s debt crisis has spread, delivered a fiery speech to the lower house of Parliament, the Bundestag, that combined a demand for governments to assert “primacy” over unruly markets with her gloomy predictions of what would happen if they failed.

“I’ll boil it down to its core,” she told lawmakers. “The euro is the foundation for growth and prosperity” in the European Union. “The euro is in danger. If we don’t deal with this danger, then the consequences for us in Europe are incalculable.”