Zur Krise des Euro. Ein währungspolitisches Problem und seine Ordnungsfolgen / The crisis of the Euro – A problem of currency policy and its consequences for the economic order

At first (Part I), it will be shown that the economic consequences and the conditions of success of the European currency union established by the Maastricht Treaty of 1992 have been either ignored or overlooked by the politicians in charge. As a much praised crowning of the European integration, the Euro as the single currency of the currency union soon revealed weaknesses of growth and competitiveness of the members of the currency union located at its periphery, which provoked public policies financed by budgetary deficits. The same held true for the reactions on the world financial crisis. The growing public debts led to a transfer problem for the currency union and the Euro (Part II). The international loans made to cover the public debts had to be serviced by emitting new loans. To service these loans, finance had to come from balance of payments surpluses, which again led to problems of competitiveness. On the other hand, the growing public debts led to a violation of the deficit criterion self-inflicted by the member states of the union. This in turn made international loans more expensive to the emitting countries and provoked speculation against the key currency of the union, the Euro. The reaction of the members of the currency union was an irritating actionism (Part III) by employing questionable instruments as parts of a placebo-policy designed to calm down an irritated public. To settle the debt problem, signaled by the deficit criterion, resort was taken to a sharp depressive policy to squeeze out the resources of their economy needed to finance the international debt. This policy went as far as obliging a debtor country to carry out a policy designed by the so-called Euro-group, the European Central Bank and the IMF, implying a blunt violation of the sovereignty of the country in question, e. g. Greece (Part IV). Finally, (Part V) and given the rising problems of the European currency union and its Euro, it will be proposed that the crisis of the currency union could be resolved by and admittedly painful and risky return to before Maastricht, i. e., to the European Currency System with its flexible exchange rates, which implies a return to the highly esteemed, while stable D-Mark.