Redline: Munich, 2014, 224 pages.
The financial markets have finally calmed down because Europe’s taxpayers have accepted liability for the investment risks in southern Europe. Yet the crisis in the real economy smoulders on due to the lack of any improvement in the competitiveness of southern European countries. With his usual clarity Ifo President Hans-Werner Sinn analyses the problems with the euro and proposes measures to overcome them. To save the European unification project, Sinn argues in favour of haircuts, temporary exits from the Eurozone, new rules for the European Central Bank and the set-up of a European Confederation based on the model of Switzerland.
Reforms Instead of Endless Bail-Out Packages
The euro time bomb keeps on ticking. Many southern and western European states are in a competition trap and are suffering from rampant mass unemployment. Over a thousand billion euros have already been provided via government bail-out packages and the European Central Bank (ECB). That served to ease the pain, but has delayed the process of self-healing. Investors were able to cut their losses and run, for German taxpayers and pensioners have now accepted liability for their losses - even if politicians more concerned about their own re-election don't like to admit it.
With his usual clarity Hans-Werner Sinn traces the developments in the euro crisis: from a behind-the-scenes detective story about the loss of wealth suffered by Germany to the widely-proclaimed lack of any alternative to the cheque book policy. He clearly argues for far-reaching reforms, including quick hair-cuts, a reshuffled composition of the Eurozone, a radical change to vote weighting within the ECB and a new vision for Europe. This is the only way that peace can be secured in Europe and that a stop can be put to the stealthy disenfranchisement of its citizens and the devalorisation of our savings - this is the only way for Europe to escape the confines of the euro.
"Gefangen im Euro"
by Hans-Werner Sinn
Publication date: April 2014
Paperback, 224 pages
Price: € 9,99 (in Germany)
“Die Uhr läuft, deshalb: alles auf den Tisch!”, Der Hauptstadtbrief, 03.07.2014, No. 123, p. 32-33.