German economists warn against liability union

154 economists have warned in a joint article against further integration of the Eurozone as proposed by Macron, Juncker and in the Berlin coalition government agreement. They criticise the planned introduction of a European monetary and investment fund and fear that money could be paid to countries that have failed to undertake reforms. Are they right to oppose the reform proposals?

Open/close all quotes
Frankfurter Allgemeine Zeitung (DE) /

A danger for prosperity and growth

"Those who reap the benefits must also bear the losses". This basic tenet of the principle of liability would be abrogated if the monetary and banking union were turned into a liability union, in the view of the economists. In their joint article in the Frankfurter Allgemeine Zeitung they warn of the consequences:

“The principle of liability is a cornerstone of the social market economy. The liability union undermines growth and endangers prosperity in all Europe. This is already becoming apparent with the decreasing wage level for a growing number of people, most of them young. Therefore we call on the German government to return to the basic principles of the social market economy. The goal must be to advance structural reforms instead of creating new lines of credit and incentives for economic misbehaviour.”

Naftemporiki (GR) /

Euroscepticism made in Germany

The economists' warning goes against the European process of integration, Naftemporiki complains:

“Euroscepticism takes many forms: the populist form of the Five Star Movement which blames the euro for all evils but offers no alternative. The Northern League and the far-right parties. ... And the elitist German economists who see the monetary union not as an important instrument for economic and political integration but as a club of the chosen. But the most worrying aspect is that the unification of Europe, which over the years has been carried out from the top downwards, is viewed with scepticism and even fear by the public in most member states. Because to this day no government has managed to adequately explain the advantages of unification.”

Neue Zürcher Zeitung (CH) /

Solidarity versus solidity

Although the economists speak out against further integration of the Eurozone their arguments should not be interpreted as anti-European, the Neue Zürcher Zeitung writes in their defence:

“In the discourse about the future of the monetary union we must be careful not to praise the one side as 'good Europeans' and write off critical voices as 'bad Europeans', the president of the German Bundesbank Jens Weidmann warned recently. One side attaches more importance to solidarity while the other values solidity, he said. Paris and Brussels have unilaterally put the emphasis on solidarity in recent times. In addition, the UK's exit from the EU and the election results in Italy certainly haven't strengthened the position of those who advocate solidity. Those economists who are pushing for united action and liability in this conflict situation needn't hide and nor must they fear being discredited or attracting nasty looks from their colleagues.”