Thursday, 4 April 2013

Dr. Bernd Lucke, founder of Germany's new anti-euro party: "We are running on a platform to dissolve the euro in a stepwise fashion"

What Hamburg University economics professor Bernd Lucke, the founder of Germany's new anti-euro party, has to say about the European common currency and the EU in general is worth reading. 25% of Germans  are according to an opinion poll sympathetic to the party's anti-euro policy. Lucke's party also has a great number of influential members and supporters among German academics and industrialists:  

BI: Germany has managed to avoid recession, and unemployment continues to fall. Why would you want to endanger that status quo by leaving the euro?

BL: There is a huge build-up of fiscal risk in Germany by the obligations which we have agreed to under the European Stabilization Mechanism. So, while it currently seems to be the case that we do benefit from the euro crisis, there are tremendous risks in the wings, and we would like to end these policies of disguising fiscal risk, and discharging banks of their risk to the detriment of taxpayers.
We think that the tensions in the euro zone, which are currently just hidden by those transfer payments we make, should be made visible and should be solved by reintroducing national currencies and exchange rate flexibility.
This may, in the short run, put some burden on the German economy as well, but I think in the long run, it will be much more beneficial than the current policy.
BI: What is the real downside to continued wealth transfers from Germany and other northern euro member states to those on the periphery?
BL: Well, I don't really see that those economies are coming back on track. What we see currently is a steep rise in unemployment and youth unemployment in the southern European countries. We do observe some improvement in the terms of current account deficits and measures of productivity, but these are an improvement only because unemployment is rising – because less productive workers have been fired.
So, I do not think that this does indicate any kind of real progress, or at least enough progress to make those countries competitive again.
The problem seems to be that we have started with a transfer union, and there is no way out that we currently see as long as we stay in the euro. Rather, it seems that this policy will linger on for years, and possibly decades, which will put a heavy burden on German taxpayers, households, as well as enterprises.
This heavy burden we just do not want to bear, and this is why we have formed our party to oppose it.
BI: Does Alternative advocate that Germany should leave the euro?
BL: No. We are running on a platform to dissolve the euro in a stepwise fashion, on a platform which proposes to reintroduce national currencies, but not by having Germany leave the euro, but rather by making the southern European countries leave the euro first, and then breaking up the remaining euro zone into other smaller currency areas, or into countries which each have their own national currency.
What we do not propose is that Germany leave the euro either now or in the future in any kind of unilateral sense.
BI: How has your background informed your views on the euro and Alternative's euro policy platform?
BL: I think there are basically two sources. One source is that I do not see much support for the economics behind the rescue policies. We have a big misallocation of capital by the rescue facilities.
We use the completely wrong incentives for the crisis countries. We do not help them solve their problems, but pile up more debt for them and force them into a recession, which makes the situation simply unsustainable.
So, there is a lot of economics which can actually be advanced against current policies.
The second source of my thinking was sort of more democratic or legalistic way of thinking in the sense that I was shocked by the fact that our government does not respective the Treaty of Maastricht. It just acts as it pleases in certain circumstances, completely disregarding all the promises which ever have been made to German voters, completely disregarding the legal framework of the European Union.
This, I think, is something which is really shameful for a democratic society, and is also a major source for my political engagement.
(bolded by NNoN)

Read the entire article here

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