Open Europe Blog

Our German-based partner organisation Open Europe Berlin has published on its blog an exclusive interview with Professor Bernd Lucke – founder and leader of Germany’s new anti-euro party Alternative für Deutschland (AfD). We have translated some of the most interesting bits.

On the topic of design flaws in the European Monetary Union (EMU)…

Bernd Lucke (BL): The root of all evil is, in my assessment, the fact that the European Treaties did not provide, and do not provide until today, for the possibility to withdraw from the eurozone…Since leaving [the euro] as a last resort was excluded from the outset, the possibility of exerting political pressure on member states was also limited.

[…]

Despite non-sustainable economic development in some countries, the financial markets obviously did not pick up on the large differences [between eurozone countries], which affected the risk of credit default. In turn, the low interest rates ‘funded’ these developments.  Actually, the alarm bells should have been ringing in view of the different developments in country-specific inflation rates, unit labour costs and trade balances. Also, the housing bubbles in Ireland or Spain should have been recognised and counteracted upon by politicians. However, warning systems were not available. It was revealed how ill-conceived the introduction of the euro was, under all aspects.

On the role of the ECB in the crisis…

BL: The ECB is not directly to blame because it was simply a part of the poorly constructed euro system…In the time before the crisis, the ECB could have been blamed at most for not pointing out the dangers associated with different inflation rates in the euro countries…Just a note: an independent central bank is good. But a central bank – like the ECB – that is no longer subject to state or democratic control and has switched to self-preservation mode is extremely dangerous.

On using tools such as the ESM and OMT to stabilise the eurozone…

BL: The ESM is ultimately a giant institutionalised eurobond, and therefore a form of debt mutualisation…What we want as AfD is…the return to the Maastricht criteria, and in particular the re-introduction and strict compliance with the no-bailout clause. No country shall be liable for the debts of other countries…Countries should and would go bankrupt, which would reduce the partly unbearable debt levels.

On how AfD sees a eurozone break-up…

BL: As an ‘immediate measure’, we demand the consequent compliance with the [existing] rules of the European Treaties as well as adding a euro-exit clause to the rules. If necessary, we want to force this right to exit by blocking future ESM loans with a German veto. Without further assistance loans, the crisis countries would decide that it is in their own interests to exit the monetary union. This should happen in an orderly and gradual [manner]. On the legal side, the European treaties need to be changed. We have parliaments and governments for that. And Germany has enough weight to push this through.

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