Tuesday, July 10, 2012

EU banking union disunites German economists

by Urs Birchler and Monika Bütler


July 10, 2012

Plans for an EZ banking union have been subjected to ‘dueling open letters’ by German-speaking economists. This column, by two Swiss-based economists, views the letters as closer than one thinks. The difference rests, not on economics, but on a judgement – will the the EU Summit’s promises be fulfilled, or is this one more instance of ever-larger dollops of euros and ever-emptier buzzwords?

The recent critique by 172 German economists of the EU Summit plans to save the euro– an open letter in the Frankfurter Allgemeine newspaper – met with reactions so hateful that its content was only of secondary importance.
  • The Financial Times accuses the 172 of “dilettantism”.
  • The Economist, under the headline “170 German professors can’t be wrong”, ridicules both the authors (“Only a handful of the signatories are much known outside their faculties”; which is demonstrably false) and their message.
  • Even the (non EU-area) Swiss media talk of “Stammtisch-Ökonomie” (kitchen-table economics) and call the leader of the 172, Hans-Werner Sinn, a “Rattenfänger” (Pied Piper).

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