PRESS RELEASE
Failed EU Economists Call for Bail-In To Avoid a Crash
Sept. 30, 2017 (EIRNS)—Fifteen leading German and French economist, including the heads of the Berlin-based DIW and the Münich-based IFO Institute (the two largest German economic think tanks), published a call on the German and French government to urgently move to prevent coming "pressure" on the Eurozone (read: collapse). The call was published in the Frankfurter Allgemeine Zeitung and Le Monde.
The reforms boil down to more European integration and a strict implementation of the bail-in. These failed economists—none of whom was able to forecast the 2008 crash—are calling for a criminal act to steal depositors’ money, which, however, won’t be able to save the system.
Germany and France should each "abandon their traditional standpoints" and converge on an agenda, they write.
"Germany should accept a higher degree of risk-sharing in the Eurozone and at the same time demand that the stimulus for reforms is kept and the no-bailout clause for states and the bail-in rules for banks become more credible.
"France in turn should accept more market discipline—but in such a form as not to endanger financial stability. A restructuring of state debt should be allowed as a last resort. Both sides should push for a simplification of budget rules and for less fine tuning from Brussels."
Signers:
Agnès Bénassy-Quéré (Paris School of Economics, University Paris 1, and French Council of economic analysis), Markus Brunnermeier (Princeton University), Henrik Enderlein (Hertie School of Governance and Jacques Delors Institute, Berlin), Emmanuel Farhi (Harvard University), Lars Feld (University of Freiburg, Institut Walter Eucken, and German Council of Economic Experts), Marcel Fratzscher (DIW Berlin and Humboldt University), Clemens Fuest (Ifo Institute and University of Munich), Pierre-Olivier Gourinchas (University of California, Berkeley), Philippe Martin (Sciences Po, and French Council of Economic Analysis), Jean Pisani-Ferry (Hertie School of Governance, Berlin, and Sciences Po, Paris), Hélène Rey (London Business School), Isabel Schnabel (University of Bonn, and German Council of Economic Experts), Nicolas Véron (Bruegel, and Peterson Institute of International Economics), Beatrice Weder di Mauro (Instead and University of Mainz) and Jeromin Zettelmeyer (Peterson Institute of International Economics)
Reporting about the call, the Tageszeitung puts it in the context of Deutsche Bank’s recent report on the coming financial collapse. The most serious problem is that central banks "print money like crazy" and this is creating social problems, feeding "right-wing populists," TAZ writes. However, the solution proposed by the 15 economists means: "less social assistance, lower wages, fewer workers’ rights." It is an opportunity for the German Social Democrats, now in the opposition, to ride the protest.
