Paper for the Conference of the EuroMemo Group in the University of Poznan - 28-30 september 2012
It all started with the initiative of a Lyons entrepreneur , Michel Robatel , who wanted to hold a Franco-German Conference of economists with a critical view of the euro , and so out of the mainstream. We, French, we then went in search of German experts meeting this definition and we contacted them.
The Symposium took place as planned at the Institute of political studies of Lyon on October 7, 2011.
The German part has, in turn, invited the French for a seminar that was held in Düsseldorf on April 27, 2012 in the Industry Club.
This seminar, consisting of six economists and industrialists on each side, has led to the launch of an appeal to the Governments of which you will find the text hereafter.
Although mixed with the noise in the French presidential campaign, this call has encountered a certain echo on both sides of the Rhine.
We expect to meet again at Paris in November next to continue our work.
The Germans who participate in this initiative are simultaneously engaged in the process of referral to the Constitutional Court of Karlsruhe against the recent European decisions relating to the euro.
The French are member of a group called POMONE from the name of the Greek goddess of prosperity.
Both the French delegates and the German delegates include men of right and left. There are thus the German side Wilhelm Nölling former SPD Deputy and Bruno Bandulet former Advisor to the president of the CSU. It is even on the French side.
The State of mind that animates the group is concern for successful removal in the order of the euro, to achieve sufficiently methodical way so that the end of this adventure does not have a cataclysmic character. However, our belief is that the worst of the disaster would be to keep the euro a few years more: Europe would end up désindustrialized, with mass unemployment and severe population enpoverishment. The European recession would have fatal consequences for the whole world.
We do not intend neither to break the European link. The Group has attempted to develop a new European monetary system more flexible than the euro and that would keep a common currency as Europe unit of account.
The next meeting should be a deepening of the solutions that we recommend in the call of May 27, 2012 and to give a greater echo to these proposals made by men whose expertise is unquestionable, at a time of crisis the euro acute.
We are also considering the establishment of a common organization, which would be later open to experts from other countries.
Here is the text of the appeal to the Governments of the 27 April 2012, in its English version (unofficial : only the French and German versions are references ).
Appeal to their Governments of a group of French and German economic experts meeting in Düsseldorf April 27th 2011
"Was die Stunde hat geschlagen, sollst deinem Volke sagen"
[When the time has come, you must have the courage to tell your people]
Thirteen years after the launch of the euro, it is patent that not only this experience achieved none of his promises, but even that his prosecution may lead to chaos.
Instead of prosperity, a slowdown of growth in the countries of the area, with a large wheel of unemployment.
Instead straight management, ten years of irresponsible increase of public spending and sovereign debt, which a generation of sacrifice is not adequate to clear.
Instead of better economic integration, imbalances between countries which worsen every day. The countries of southern Europe, Greece, but also Portugal, Spain, Italy, and even France have seen their competitiveness degrading irreversibly for ten years. Drying the purchasing power of each, this situation impedes the growth of the other and therefore the development of the single market.
Instead of a rapprochement of peoples, a growing animosity between creditors and debtors.
Instead of a progress of democracy, the decisions from top imposed on peoples who refuse.
Successive plans intended to "save the euro" are futile because they address, with little effect, only public deficits and non-what is root difficulty: the different propensity of countries with inflation. The only solution would be deflation of prices in deficit countries: but such a policy never succeeded anywhere (ex: the Germany of 1930, the France of 1934).
Pursuing a goal that it will anyway not achieve, Europe is driven in a spiral of recession that, with respect to the first market in the world, concerns the whole planet.
The recession goes with inflation: in breach of the statutes, the new head of the European Central Bank, in a desperate tentative to make the euro survive, has launched massive monetary creation for the benefit of private banks, too happy with the windfall.
It is just as illusory to hope to organize a "Europe of transfers", which would require the sustainable transfer of hundreds of billions of euros to countries in difficulty, i.e. a collectivization of government deficits. This solution is rejected by peoples sought put to contribution while offering no hope of relief to the weakest.
Therapeutic bashing, which is that the short term, cannot avoid the acceleration of the shocks that affect not only the sphere financial but also the real economy.
If there is not soon put an end to it, the experience of the single currency will end more dramatically: worsening of the economic situation, unemployment soared, social disorders, rise of extremism, the resurgence of old conflicts, destruction of the rule of law: Europe would become ungovernable.
It is clear that only the real devaluations and revaluations, tailored to the circumstances of each country, will be able to put an end to the imbalances between them and then restore growth. History offers many examples of failures of currency unions: it is apparent that not only it is possible to manage them in an orderly fashion, but that they have proved beneficial, and this after only a few months.
This is why German economists and French signatories, who met on 11 and 12 April 2012 in Düsseldorf, urge their respective Governments to agree and to propose to the other European Union Member States, to put an end to the experience of the single currency and, to take on that purpose, the following measures without delay:
-replace the euro by new national currencies in each of the States, knowing that some countries may have bilateral or multilateral agreements for pooling their currency;
- create a new European monetary system, with a European unit of account equal to the weighted average of national currency units;
- announce new parities between the new national currencies calculated by reference to the new unit of account European currencies, in view to limit speculation, restore the competitiveness of all States, ensure balanced trade and reduce unemployment;
-ensure, though a European Monetary Institute, that real exchange rates of national currencies are then stabilized, within a margin of fluctuation to determine;
-convert in each country, on the basis of one to one, of the euro in national currency, all of the prices and domestic wage and bank assets;
-convert according to the same rule, the public debt of each country of the euro in their new national currency;
-convert international claims in the European unit of account.
Negotiated arrangements to repay public and private debts may be passed between creditors and debtors, on the basis of the rules set out in the previous two paragraphs
The transition should be as short as possible; it poses no major technical problems. The new rules of the game must be displayed clearly. States will be asked to ensure, in relying on their central banks national, now independent, that the proposed transition does not leads to destabilization of the financial system European and even gives them ways to contribute actively to the return of growth.
By launching this appeal, French and German economists signatories wish not to question the idea of Europe, but on the contrary, they want to contribute, by their expertise, to the renewal of the European construction on a renovated and realistic basis, as well as to the economic recovery of Europe.
Au lieu d’une meilleure intégration économique, des déséquilibres entre les pays qui s’aggravent chaque jour.
Bruno Bandulet, Rolf Hasse, Wilhelm Nölling, Pr .Karl Albrecht Schachtschneider , Pr. Wolf Schäfer, Dr. Dieter Spethmann, Joachim Starbatty,
Alain Cotta, Jean-Pierre Gérard, Roland Hureaux, Gérard Lafay, Philippe Murer, Michel Robatel, Jean-Jacques Rosa,
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