German industrialists list demands to end current crisis and avoid another

Twenty one of Germany’s leading industrialists and academics have today printed a hard-hitting list of stipulations for the eurozone to emerge from its crisis, increasing the pressure already on EU leaders, who meet to discuss the topic on Thursday.

A key stipulation made by the senior managers at companies such as Linde, HVB, KPMG, Wacker Chemie and Thüga, plus various academics, is: “Countries that cannot repay their debts should leave the economic union.

“Exit from the eurozone would be provided for, in case of bankruptcy,” said the group, who come from member companies of Germany’s ifo Institute.

Their Bogenberger Erklärung, published today, said: “Only a currency union which remains a voluntary alliance of states with mutual respect to given rules, has lasting continuity.”

They also called for German politicians to negotiate a new EU treaty restricting ECB powers. If such measures are not agreed, they said, Germany should not help its neighbours.

The European Central Bank should be limited only to monetary policy, and the distribution of votes and decision-making powers of its board should be reorganised.

“It is unconscionable that the ECB board, on which Germany is unrepresented, assumes the right to give a group of member countries the possibility to solve their external trade finance problems over a long period by using the money printing presses.

“The highest political priorities in Germany must therefore include making rules in a new EU contract by which the ECB works.”

They added: “In no case can Germany agree to a change in the treaty if it makes way for a broadening of the public sector rescue measures. “

The authors also called for the EFSF rescue fund, of which Germany is by far the biggest supporter, to be accompanied by a clear crisis mechanism and insolvency order defining and limiting the aid measures states must take in crises.

“The historically high creditworthiness of our country in capital investors’ opinion is now seriously threatened. The politicians take the position, that the guarantees made in taking the rescue actions will not be called upon, that the leverage of the EFSF will not lead to an increase in risks for Germany. This position is no longer credible.

“This crisis is not about only a crisis of trust which has its root causes in dysfunctional markets, as the debtors and their followers repeatedly claim, in order to open the purses of their saviours. Rather, it is about a classic crisis in balance of payments. In this respect, the attempt to hold the crisis in check though increased firepower of the rescue system is doomed to failure.

“In reality the failing competitiveness of the peripheral countries will be secured through this, because as long as public means stand available to finance the deficits, the necessary correction of the high prices and wages will remain.”

 

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