The situation of European monetary union was the main focus of a strategy meeting held by the Friends of the Ifo Institute and Ifo’s Executive Board on 15 October 2011 in Bogenberg, Obertaufkirchen. Concern for Germany and Europe voiced at this meeting led both parties to draft the Bogenberg Declaration, a list of statement aimed at preventing Germany from accepting excessive liability for the bailout packages provided by the community of states and the undermining of market processes caused by such packages.
The Declaration makes the following recommendations:
- The ECB should limit itself to formulating monetary policy only and give up its role as Lender of Last Resort. More democratic bodies should be responsible for bailout packages.
- The distribution of voting rights and decision-making rules in the ECB’s Governing Council should be revised.
- Target credit should be settled once a year with interest-bearing, marketable collateral as in the USA.
- The bailout package should be complemented by a clear crisis mechanism and an insolvency act limiting the bailout measures undertaken by the community of states to short-term liquidity loans and longer-term guarantees made after haircuts for specific period.
- In the mid-term banks should back up their government bonds purchases with equity and accept the state as a co-owner if necessary, if they do not have the resources to recapitalize on their own.
- Countries that are not in a position to repay their debts must leave the monetary union.
An updated version of the Bogenberg Declaration was published in December 2012 in the DGAP Yearbook of International Politics, Vol. 29 (Oldenbourg Verlag).
“Europäische Währungsunion: Thesen und notwendige Schritte zur Krisenbewältigung”, in: J. Braml, S. Mair und E. Sandschneider, Hrsg., Außenpolitik in der Wirtschafts- und Finanzkrise, Oldenbourg Verlag: München, 2012, pp. 317-328. (German)
“Bogenberger Erklärung: Sechzehn Thesen zur Situation der Europäischen Währungsunion”, ifo Schnelldienst 64 (23), 2011, pp. 03-11 (German); Translation:
"Bogenberg Declaration: Sixteen Theses on the Situation of the European Monetary Union" (English)
Press Briefing, 30 March 2012: Bogenberger Erklärung und Target-Kredite der Deutschen Bundesbank
In the framework of a press briefing held on 30 March 2012, the Family Business Association – ASU expressed its support of the Bogenberg Declaration. Dr. Manfred Wittenstein, Board Chairman of Wittenstein AG, Michael Moritz, Chairman of the Regulatory Commission, Family Business Association, and Prof. Hans-Werner Sinn, President of the Ifo Institute, participated in the briefing.
Speech by Hans-Werner Sinn, Ifo Institute, 30.03.2012 | 00:19:20 | German.
Ifo Press Releases
- Bogenberg Declaration and the German Bundesbank’s Target Credit, Mar 30, 2012.
- 16 Theses on the Situation of the European Monetary Union, Dec 7, 2011.
“Sorge, dass das ganze System in Gefahr ist”, Straubinger Tagblatt, 31.03.2012, p. 12.
“Deutschland wird erpressbar”, Süddeutsche Zeitung, 31.03.2012, p. 25.
“Sorge um Deutschland und Europa”, Frankfurter Allgemeine Zeitung, 07.12.2011, p. 12.
“Agenda-Liste zur Situation der Währungsunion”, Frankfurter Allgemeine Zeitung, 07.12.2011, p. 12.