As part of our TARGET discussion, I had already asked what drives the alarmist economists, who only warn but never name the reasons for the problems they have “uncovered”? Now the leader of this species, Hans-Werner Sinn, is back and takes the twentieth anniversary of the euro as an opportunity to state completely pointlessly that the euro has not been a success story. Therefore, one must explicitly ask whose political agenda the man pursues, who so willingly styles himself as a neutral academic?
Sinn writes in his column in the German business daily Handelsblatt:
“If you take the date of exchange rates in May 1998 as the starting point, the euro is 20 years old. The first decade was party in southern Europe, the second was in a mood of hangover – and the third is marked by increasing political radicalisation”.
The man who once wanted to impose radical absolute wage cuts on Germany devotes four fifths of his article to southern Europe, which for him consists of Italy, Spain, Portugal and Greece. With his so-called “party” in the first ten years, Southern Europe had laid the foundation for the crisis in the Eurozone, which continues until today due to irresponsible ECB policy and TARGET balances, above all at the expense of the Germans.
France is never mentioned and the devastating role Germany played in the creation of the euro crisis is of course completely ignored as is expected from a “good” German economist. Only the others have – according to Sinn – recklessly gambled away their competitiveness and now do not want to take responsibility for their prodigality.
Where “radical socialists rule”
We have shown in many articles (here, for example) that Mr Sinn’s economic analysis is meaningless, which is why I do not want to repeat all that again. However, the political classification of the emeritus professor of economics is downright grotesque. He rightly deplores the still miserable economic situation in the four southern European countries and, above all, mentions the low level of industrial production and the stubbornly high level of youth unemployment. But then he comes to a political appraisal that shows once and for all the true motivation for his argumentation. He writes:
“These countries are ruled by radical socialists who do not want to know anything about budgetary discipline, and in Italy the old parties have been swept away. The radical five-star and Lega government, under the protection of the other euro countries, wants to borrow much more than it already does and threatens to leave the euro if the EU denies it this right”.
This is more than absurd; it is a perfidious and undoubtedly a deliberate distortion of political conditions. In Greece, as every child knows, it is no longer the Socialists, who had been democratically elected for the first time in January 2015, but the troika that has driven out all socialism and forced a strict neoliberal policy upon the Socialists since the summer of 2015. In Portugal, the Socialist Party under Antonio Costa came to power in 2015 because its conservative predecessor government drove the country ever deeper into crisis. Since then, the economy has stabilized somewhat for the first time. The finance minister of this government is now head of the Eurogroup, which certainly does not indicate that radical socialists are at work here.
Even more incredible is the meaningful classification of political conditions in Spain. There, the very moderate Social Democrats under Pedro Sánchez took power just two months ago from the Conservatives (via a vote of no confidence) who, believe it or not, were in power from 2011 to 2018 under Mariano Rajoy. But that’s not all. The new Italian government is solely included among the Socialists because they want to take out loans (see my analysis here).
The political agenda is nationalistic
This is all so risible that you need not bother criticising it. Yet it shows very clearly the political agenda of the writer who employs such absurdities. Just as in the TARGET debate, under the cover of being an academic, Sinn´s only concern is to create a mood against the euro. At the same time, however, he is certainly making propaganda for those who, from a German-national perspective, are committed to the abolition of the euro and following an extreme neo-liberal programme. The entire leadership of the ultra-right German political party, AfD, can only applaud Sinn´s argumentative acrobatics.
By denying any German guilt, fomenting objectively veiled resentment towards other nations, and blaming all this on the “socialists”, one kills several birds with one stone. If you do it under the cover of being an “objective academic”, it is particularly effective, because the large mass of Germans are delighted when their prejudices seem to be scientifically confirmed.
When will active academics at German universities understand this and openly distance themselves from one of their own who has always been on the border of seriousness but has now clearly crossed this border and is involved in a nationalist political campaign?
This article was published in German on Makroskop (makroskop.eu) and in English on Brave New Europe (braveneweurope.com).