Thilo Sarrazin: Financial assistance not needed
The crisis is shaking Europe. According to the most pessimistic forecasts, in the near future the Eurozone is going to fall to pieces, and already now many agree that the adoption of the Euro was a mistake. "Europe doesn’t need Euro" - this is the second book by German politician Thilo Sarrazin.
The crisis is shaking Europe. According to the most pessimistic forecasts, in the near future the Eurozone is going to fall to pieces, and already now many agree that the adoption of the Euro was a mistake. "Europe doesn’t need Euro" - this is the second book by German politician Thilo Sarrazin. It was published in May and has already caused a sensation. Press-conference, at which the author presented his work, was accompanied by demonstrations of protest.
However, it is not for the first time that Sarrazin finds himself in the center of a big political scandal. In 2010 after the release of his first book "Germany Does Away with Itself", in which he described the problems of immigrants in Germany, he had to leave the Board of Directors of the German Federal Bank due to accusations of racism. At the same time he was almost denied his membership in the Social Democratic Party of Germany. Thilo Sarrazin shared his opinion on the Euro and Europe in an exclusive interview with the "Voice of Russia".
In your book you state that Europe doesn’t need the Euro. Does it mean that Germany should return to the Deutsche mark?
In my book I wrote that Germany should return to the Deutsche mark. I’ve carried out an analysis that made it clear that the Euro had not brought any significant economic advantages to Germany, and calculated the risks. I’ve come to the conclusion that we had not used the Euro in order to achieve either real economic goals, or peace and freedom; just the same we had not used the Euro for the benefit of either employment and work, or welfare and growth. Therefore, we should aim at complying with the provisions of the Maastricht Treaty that means that the European Central Bank must return to the course, which will focus on stabilization of prices. Covering budget deficits of other countries is not the Central Bank’s task. And after that there will be time to consider whether the Euro is worth saving.
Does it refer to the Eurozone as a whole?
As regards the Eurozone, the agreements should be suspended, there should be no electoral councils in the countries, and the Bank of circulation should not help in financing government deficits and debts. And regarding the countries that cannot or do not want to carry out the necessary reforms and to take stabilizing measures, it may be better for them to leave the Eurozone and return to their national currencies.
In the case of Greece, its leaving the Eurozone is very likely, because right now this country is not in a state to reform its economy without devaluation. Other countries, where the question of withdrawal from the Eurozone has possibly arisen, are Portugal, Spain, Italy, and even France, perhaps.
Today Germany is in the most favourable position in comparison with other European countries. Why do you think that the Euro has caused harm?
We can just compare the figures. The Euro has not resulted either in economic growth, or in growth of employment. Even before the Euro, Germany had the strongest economy. As long as our partners from the South and the West pay for the imports from Germany in credits of the Bank of circulation, long-term growth is possible.
A whole chapter of my book is devoted to the issue, whether the Euro has influenced all these aspects and the success of the economy. And the answer is clear – no, it has not.
Why do you think your book was so sharply criticized?
Those who say to the Chancellor, that if the Euro falls the Europe will collapse, have felt the threat, when the book entitled «Europe doesn’t Need Euro» was published. And they have tried to react as sharp as they can. But since in my book I describe everything clearly, in plain language and strictly to the point, it only adds weight to my arguments.
What should happen for the countries to change their courses?
There should be no financial assistance to other countries, and instead each state should take all the necessary measures independently, divide its households into zones and put in order its financial plans. All the tools for this are in the hands of each state. After that it will become clear, if the state is able to continue or not. And those states that are not able to establish their position for a long time should be forced to leave the Eurozone, because no one will want to lend money to this country.
What do you think about the idea of a Bank Union, which Angela Merkel approvingly commented upon the other day?
The idea of a Bank Union is not viable. It is even worse than the Eurobonds. It means that German banks will be responsible for the mistakes of foreign financial institutions. This should not happen.
There is an opinion that Germany is building its economic relations, striving to compensate for the Holocaust. What is your opinion?
Many people, who support the Euro and the undertaking of other countries’ debts, state the fact of the Holocaust as an argument. I personally think it's wrong. There shouldn’t be such a thing that after 70 years of normal functioning after the war Germany of a sudden takes over the debts of other countries.
Even in Russia they are reluctantly recalling Stalin’s reign, because a lot of things that were happening then were unfair. People must accept this injustice in their hearts, but the feeling of guilt must not dictate economic decisions.
The crisis is shaking Europe. According to the most pessimistic forecasts, in the near future the Eurozone is going to fall to pieces, and already now many agree that the adoption of the Euro was a mistake. "Europe doesn’t need Euro" - this is the second book by German politician Thilo Sarrazin. It was published in May and has already caused a sensation. Press-conference, at which the author presented his work, was accompanied by demonstrations of protest.
However, it is not for the first time that Sarrazin finds himself in the center of a big political scandal. In 2010 after the release of his first book "Germany Does Away with Itself", in which he described the problems of immigrants in Germany, he had to leave the Board of Directors of the German Federal Bank due to accusations of racism. At the same time he was almost denied his membership in the Social Democratic Party of Germany. Thilo Sarrazin shared his opinion on the Euro and Europe in an exclusive interview with the "Voice of Russia".
In your book you state that Europe doesn’t need the Euro. Does it mean that Germany should return to the Deutsche mark?
In my book I wrote that Germany should return to the Deutsche mark. I’ve carried out an analysis that made it clear that the Euro had not brought any significant economic advantages to Germany, and calculated the risks. I’ve come to the conclusion that we had not used the Euro in order to achieve either real economic goals, or peace and freedom; just the same we had not used the Euro for the benefit of either employment and work, or welfare and growth. Therefore, we should aim at complying with the provisions of the Maastricht Treaty that means that the European Central Bank must return to the course, which will focus on stabilization of prices. Covering budget deficits of other countries is not the Central Bank’s task. And after that there will be time to consider whether the Euro is worth saving.
Does it refer to the Eurozone as a whole?
As regards the Eurozone, the agreements should be suspended, there should be no electoral councils in the countries, and the Bank of circulation should not help in financing government deficits and debts. And regarding the countries that cannot or do not want to carry out the necessary reforms and to take stabilizing measures, it may be better for them to leave the Eurozone and return to their national currencies.
In the case of Greece, its leaving the Eurozone is very likely, because right now this country is not in a state to reform its economy without devaluation. Other countries, where the question of withdrawal from the Eurozone has possibly arisen, are Portugal, Spain, Italy, and even France, perhaps.
Today Germany is in the most favourable position in comparison with other European countries. Why do you think that the Euro has caused harm?
We can just compare the figures. The Euro has not resulted either in economic growth, or in growth of employment. Even before the Euro, Germany had the strongest economy. As long as our partners from the South and the West pay for the imports from Germany in credits of the Bank of circulation, long-term growth is possible.
A whole chapter of my book is devoted to the issue, whether the Euro has influenced all these aspects and the success of the economy. And the answer is clear – no, it has not.
Why do you think your book was so sharply criticized?
Those who say to the Chancellor, that if the Euro falls the Europe will collapse, have felt the threat, when the book entitled «Europe doesn’t Need Euro» was published. And they have tried to react as sharp as they can. But since in my book I describe everything clearly, in plain language and strictly to the point, it only adds weight to my arguments.
What should happen for the countries to change their courses?
There should be no financial assistance to other countries, and instead each state should take all the necessary measures independently, divide its households into zones and put in order its financial plans. All the tools for this are in the hands of each state. After that it will become clear, if the state is able to continue or not. And those states that are not able to establish their position for a long time should be forced to leave the Eurozone, because no one will want to lend money to this country.
What do you think about the idea of a Bank Union, which Angela Merkel approvingly commented upon the other day?
The idea of a Bank Union is not viable. It is even worse than the Eurobonds. It means that German banks will be responsible for the mistakes of foreign financial institutions. This should not happen.
There is an opinion that Germany is building its economic relations, striving to compensate for the Holocaust. What is your opinion?
Many people, who support the Euro and the undertaking of other countries’ debts, state the fact of the Holocaust as an argument. I personally think it's wrong. There shouldn’t be such a thing that after 70 years of normal functioning after the war Germany of a sudden takes over the debts of other countries.
Even in Russia they are reluctantly recalling Stalin’s reign, because a lot of things that were happening then were unfair. People must accept this injustice in their hearts, but the feeling of guilt must not dictate economic decisions.
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