Can Germany save Europe without jeopardising its own finances? Most certainly! An interview with Vorwaerts, the SPD's official newspaper

During August I was interviewed by Markus Schöning on behalf of Vorwaerts, the SPD’s official newspaper. Here is what I had to say (in German only). 

Icon   Interview zur Eurokrise mit Yanis Varoufakis

Europa als Dampfmaschine

Markus Schöning • 09. September 2011

Eurobondes sinnvoll gestalten. Foto: Dr. Klaus-Uwe Gerhardt/pixelio.de
Eurobondes sinnvoll gestalten. Foto: Dr. Klaus-Uwe Gerhardt/pixelio.de

Markus Schöning: Angesichts des verstärkten Engagements der Europäischen Zentralbank und der Rufe nach Einführung von Eurobonds wächst in Deutschland die Angst eine Transferunion zu werden. 

Yanis Varoufakis: Deutschland erzielt gegenwärtig immer noch Gewinne auf der Basis von zwei Nachfragemärkten: dem asiatischen Markt und der Eurozone. Ein Niedergang des Euro würde schlagartig zum Verlust von beidem führen, was für Deutschland katastrophal wäre. Schon im deutschen Interesse muss der Euro daher geschützt und erhalten werden. Um nicht niederzugehen, braucht es allerdings einer neuen Konzeption der Euro-Architektur. Eine Variante der Eurobonds, welche nicht auf staatlichen Garantien beruht, wäre Teil dieser Neukonzeption. Gleichzeitig muss jedoch eine sinnvolle Überschussverteilung stattfinden. 

Wie könnte eine solche Überschussverteilung aussehen? 

Gegenwärtig schickt der reiche Norden der europäischen Peripherie Geld, das direkt Richtung Banken weiterwandert, die es dann bei sich horten – das Schlimmste aus zwei Welten. Aber stellen Sie sich vor, dass die deutschen Überschüsse in wettbewerbsorientierte und profitable gemeinsame Projekte investiert würden: z.B. in einen TGV-Zug, der von Patras startet und die griechischen Häfen mit Österreich verbindet. Daran könnten sich deutsche und französische Unternehmen beteiligen. Sie könnten durch diese Investitionen Gewinne einfahren, während sich gleichzeitig die südeuropäische Infrastruktur entwickelt. Durch ein solches Verteilungssystem produktiver Investitionen können wir einen gesamteuropäischen Aufschwung erreichen und Deutschland könnte seine Märkte und Gewinne beibehalten. 

Neben der Verschuldung der öffentlichen Haushalte kranken die Länder der europäischen Peripherie auch an mangelnder Wettbewerbsfähigkeit. Wo könnte man hier anpacken? 

Ich habe erst kürzlich mit Vertretern der European Investment Bank (EIB) gesprochen. Diese sagten mir, dass sie mindestens 10 große Projekte für Griechenland in der Schublade haben, welche sie als gewinnbringend ansehen. Dass diese Projekte nicht vorankommen liegt daran, dass 50 Prozent ihrer Finanzierung von den betroffenen europäischen Mitgliedstaaten kommen müsste, in diesem Fall also von Griechenland. Griechenland ist jedoch praktisch insolvent. Wenn die EIB die Möglichkeit hätte, die ausstehenden 50 Prozent über Eurobonds finanziert zu bekommen, würden diese Projekte laufen. 

Um was für Projekte handelt es sich konkret? 

Westeuropa hat sehr gute Bahnsysteme, Osteuropa und der Balkan hingegen nicht. Ein modernes Bahnsystem für die Region wäre eine zukunftsträchtige Investition. Dieses Projekt könnte in Kooperation mit chinesischen Firmen wie COSCO laufen, welche heute bereits in Piräus investiert, damit Griechenland eine Drehscheibe wird, um Europa mit Asien und Afrika zu verbinden. Darauf aufbauend könnte es weitere Investitionsmöglichkeiten geben, von denen deutsche Unternehmen profitieren würden.

Zudem hat Griechenland viele Möglichkeiten für Solar- und Windenergie. Für die deutsche Ökoenergie, die sehr fortschrittlich ist, bietet sich auf diesem Feld viel Raum für Investitionen, wovon sowohl Deutschland als auch Griechenland profitieren könnten. Und es gibt drittens in Griechenland große Möglichkeiten für eine Reform der bisherigen gemeinsamen Agrarpolitik der EU. Da wären zum Beispiel biologische Landwirtschaftsprodukte, für die es in Deutschland einen großen Markt gibt. Griechische Firmen wollen in diese Richtung investieren, ihnen fehlt es zurzeit jedoch an Kapital und Vernetzungen.

Dies sind ein paar Beispiele für einen Marschall-Plan oder New Deal. Die ganze Eurozone könnte die Dampfmaschine sein, welche ganz Europa aus der Krise heraus fährt. 

Die Finanzierung der Projekte würde also in Koordination zwischen der EZB und der EIB stattfinden? 

Genau. Durch die von der Europäischen Zentralbank (EZB) ausgestellten Eurobonds könnte ein Kapitaldepot geschaffen werden, welches gewinnorientierte Investitionen von der europäischen Peripherie bis ins Zentrum Europas tätigen könnte. Wenn die EIB profitable Projektpläne hat und 50 Prozent der Kosten für diese Projekte übernimmt, gibt es keinen Grund, warum die EZB nicht durch den Verkauf von Eurobonds im Namen der involvierten EU-Länder die restlichen 50 Prozent übernimmt und diese den betroffenen Ländern anrechnet. 

Sobald das Projekt fertig ist, sind die EU-Länder vertraglich verpflichtet, aus ihrem Anteil an den Gewinnen an erster Stelle ihre Schulden bei der EZB zu begleichen, welche wiederum ihre Eurobond-Gläubiger bezahlen kann. Auf diese Weise wird die EIB nicht länger auf Finanzierung durch einzelne Nationalstaaten beschränkt, während die Eurobonds für die EZB aufkommensneutral bleiben. Die Investitionen kommen voran und alle profitieren.

Viele befürchten im Falle von Eurobonds eine Erhöhung der Zins- und Kostenlasten für die Garant-Länder, wie etwa Deutschland oder Österreich. Sie erwähnten Eurobonds, die gerade nicht auf staatlichen Garantien beruhen würden. Wie könnten diese aussehen?

Im Falle von Eurobonds, welche auf Garantien der reichen EU-Länder beruhen, wäre diese Sorge berechtigt. Es gibt jedoch auch einen anderen Weg für Eurobonds: Für alle EU-Länder wird eine Umschuldung für den Teil der Gesamtschulden organisiert, welcher die Maastricht-Kriterien nicht überschreitet, ergo: 60 Prozent des Bruttosozialprodukts. Die EZB bedient diese Schulden bei den Gläubigern der EU-Staaten, indem sie selbstständig Eurobonds ausgibt und auf den Märkten verkauft, für welche sie allein bürgt – ohne Garantien von Deutschland oder anderen AAA-Staaten.

Die betreffenden EU-Länder werden diese Schulden bei der EZB selbstverständlich abbezahlen, allerdings bei niedrigerem Zinsniveau und längeren Laufzeiten, welche der Laufzeit der neu ausgegeben Eurobonds der EZB entsprechen. Da dies für die EZB absolut aufkommensneutral wäre und angesichts des hervorragenden internationalen Rufes der EZB, wären die Zinsraten für diese Sorte Eurobonds nicht hoch, sie lägen bei maximal 2,5 Prozent. Und da sie nicht auf Garantien von Ländern wie Deutschland oder Österreich beruhen würden, hätten sie keine Auswirkungen auf deren Zinsniveau. Kurz gesagt, vermittelt die EZB zwischen der Eurozone und den internationalen Märkten, so dass eine Umschuldung ohne Haircuts und ohne ungeliebte Fiskalunion stattfinden kann.

Yanis Varoufakis leitet den Fachbereich Politische Ökonomie an der Universität von Athen. Zusammen mit dem Ökonomen Stuart Holland hat er ein Thesenpapier zur Bekämpfung der Finanzkrise erarbeitet, das er unter dem Namen ” Modest Proposal ” auf seinem Blog vorstellt. Die Kernpunkte des Modest Proposal wurden von mehreren ehemaligen europäischen Regierungschefs, darunter Guy Verhofstadt und Giulianio Amato, in einer gemeinsamen Erklärung unterstützt. Mehr zum Autor unterhttp://yanisvaroufakis.eu/euro-crisis/

10 Comments

  • I’m German and ‘ve just read the interview: Like you and the readers of this blog (and millions of others who keep hearing about the latest financial disasters), I would love to know how to find the way out of this mess that the Eurozone is currently in.
    If I understand your proposal in the interview well, you propose mainly two measures as a remedy for Greece:
    1. The money that Greece currently does not have in order to it’s 50% share in some infrastructure projects should be given to Greece. I agree that something has to be done in order to give the Greek people some hope and that it probably would be more than appropriate to inject some money into the Greek economy in order to at least partly cushion the blow that’s currently hitting Greece due to the enforced austerity. That said, giving Greece the, say 5 Billion EUR (or whatever the amount would be) that are needed to unlock some EU-funds of another 5 Billion EUR effectively amounts to making Greece a present of 10 Billion EUR. Personally, I think giving Greece a few Billion EUR to upgrade the infrastructure may be worth doing. But it would still be a present – and Greece has received quite a lot of funds just like that over the last few decades. It hasn’t prevented Greece from getting into this kind of mess – and I don’t think it would get Greece out it’s current mess. Greece’s problem is not so much the infrastructure but that it hasn’t yet succeeded in implementing an economic growth model beyond living off the subsidies payed by the EU’s net contributors (i.e. Germany, the Netherlands, etc) and growth stimulated by the debt-bubble that has just burst. However, giving some money for -at least in principle useful infrastructure – is probably better than paying subsidies like in the past such as for olive trees that don’t exist, etc.

    2. The second measure you suggest sounds interesting: The ECB should exchange all the outstanding debt of the Euroland countries for new bonds that it would issue itself. That would be done up to a debt level of 60% of national GDP of the individual countries. I guess that in the kind of mess we are, some sort of procedure like that may be the way out. However, this would imply some sort of guarantee by the not yet insolvent countries (i.e. Germany, Netherlands, France, etc) for e.g. Greek (i.e. Currently junk debt) – which wouldn’t be popular in the more solvent countries (to put it mildly). Furthermore, I guess it would lighten the load for Greece for the next 60% of national debt it piles up (at the current rate, that wouldn’t take long, I guess). But with Greece’s debt already standing at 160% or so of GDP, how would this avoid the default? In the end, the debt would still need to be cut by, say, 50% or so of the current total. Plus it would effectively get the Eurobonds you suggest for the next 60% of debt. I can see how this would be a good thing for Greece. But I am not sure how the politicians in the countries that would have to pay for this could sell it to their electorate. After all, the German population did not have a fantastic time from about 1996 to 2006. The standard of living was flat and unemployment was high. The unpleasant side effect of all the funds flowing to the former communist east and then some belt- tightening once German public debt was so high that the living standard could no longer be raised by increased debt. It was a painful phase for many people in Germany – and a time in which we saw Spain, Greece, etc increase the standard of living of their population significantly. So the periphery was having a party, partly financed by the net transfers received from the EU and partly by cheap debt available due to the Euro. Now the party is over… And Germany has to pay for it – again (even though it did nit celebrate but had it’s own period of austerity 1996-2006 to remain competitive on the world market? I would like to help Greece and other countries that are currently in serious trouble. But the solution can’t always be to let the Germans pay. That’s just not fair.

    I hope a way out of this big mess can be found. And ideally, it would not be one that punished the countries that have been prudent in the past – or completely wreck countries like Greece (though they are in their current mess at least in part by incompetence, corruption and shor-sightedness). Hopefully, some sort of “win-win” solution can be found.

    By the way: I really don’t think that the whole crisis is part of some mysterious German plan to be “the ruler of Europe” or anything like that. Germany would be much happier if the periphery wasn’t so close to collapse. But they resent having to possibly pay for other countries imprudence after they suffered so much through the German austerity measures endured 1996-2006. I think, they have a point. Before Germans are taxed even more and / or have to work harder for less money to pay for the Grrek mess, it would be nice to see the Greek government do what it possibly can to help solving the mess they got themselves into. Just like the Germans did 1996-2006. It isn’t fun. But necessary. Having an inefficient tax system (and being very slow to change that) and hanging onto national golf reserves with 35 Billion EUR doesn’t strike me as fair when your country is in an emergency like this.

    All this said, I hope there is a way out – and I really like your blog! Very interesting thoughts and discussions!

    • What this comment overlooks is the appropriate historical point of reference for the growth problems in Greece. If find it sad that a German commentator would adopt a stance reflective of such ignorance of his/her own historical fortune.

      Greece did not benefit, as did Germany, from a generous Marshall plan gift of hundreds of millions of US dollars. Nor was Greece occupied by an army that left its artistic heritage in tact. Last but certainly not least, there is the substantial Greek gold bullion bank reserves taken during Germany’s WWII artistically expensive occupation of Greece.

      If Germany were to agree to return either the bullion or its equivalent market value, this would offset much of the debit. Alternatively, it could offer a version of the Marshall plan–of value equivalent to what it benefitted from.

    • Hello, interviewer here. The ECB would be its own guarantor. As explained in the interview, the ECB would cover the 60 % national debt of each Euro member-state share by selling its own Eurobonds to Chinese, Russian etc. investors. No German or Austrian guarantees involved.

  • I’m German and ‘ve just read the interview: Like you and the readers of
    this blog (and millions of others who keep hearing about the latest
    financial disasters), I would love to know how to find the way out of
    this mess that the Eurozone is currently in.
    If I understand your proposal in the interview well, you propose mainly
    two measures as a remedy for Greece:
    1. The money that Greece currently does not have in order to pay its’ 50%
    share in some infrastructure projects should be given to Greece. I agree
    that something has to be done in order to give the Greek people some
    hope and that it probably would be more than appropriate to inject some
    money into the Greek economy in order to at least partly cushion the
    blow that’s currently hitting Greece due to the enforced austerity. That
    said, giving Greece the, say 5 Billion EUR (or whatever the amount would
    be) that are needed to unlock some EU-funds of another 5 Billion EUR
    effectively amounts to making Greece a present of 10 Billion EUR.
    Personally, I think giving Greece a few Billion EUR to upgrade the
    infrastructure may be worth doing. But it would still be a present – and
    Greece has received quite a lot of funds just like that over the last
    few decades. It hasn’t prevented Greece from getting into this kind of
    mess – and I don’t think it would get Greece out it’s current mess.
    Greece’s problem is not so much the infrastructure but that it hasn’t
    yet succeeded in implementing an economic growth model beyond living off
    the subsidies payed by the EU’s net contributors (i.e. Germany, the
    Netherlands, etc) and growth stimulated by the debt-bubble that has just
    burst. However, giving some money for -at least in principle useful
    infrastructure – is probably better than paying subsidies like in the
    past such as for olive trees that don’t exist, etc.

    2. The second measure you suggest sounds interesting: The ECB should
    exchange all the outstanding debt of the Euroland countries for new
    bonds that it would issue itself. That would be done up to a debt level
    of 60% of national GDP of the individual countries. I guess that in the
    kind of mess we are, some sort of procedure like that may be the way
    out. However, this would imply some sort of guarantee by the not yet
    insolvent countries (i.e. Germany, Netherlands, France, etc) for e.g.
    Greek (i.e. Currently junk debt) – which wouldn’t be popular in the more
    solvent countries (to put it mildly). Furthermore, I guess it would
    lighten the load for Greece for the next 60% of national debt it piles
    up (at the current rate, that wouldn’t take long, I guess). But with
    Greece’s debt already standing at 160% or so of GDP, how would this
    avoid the default? In the end, the debt would still need to be cut by,
    say, 50% or so of the current total. Plus it would effectively get the
    Eurobonds you suggest for the next 60% of debt. I can see how this would
    be a good thing for Greece. But I am not sure how the politicians in the
    countries that would have to pay for this could sell it to their
    electorate. After all, the German population did not have a fantastic
    time from about 1996 to 2006. The standard of living was flat and
    unemployment was high. The unpleasant side effect of all the funds
    flowing to the former communist east and then some belt- tightening once
    German public debt was so high that the living standard could no longer
    be raised by increased debt. It was a painful phase for many people in
    Germany – and a time in which we saw Spain, Greece, etc increase the
    standard of living of their population significantly. So the periphery
    was having a party, partly financed by the net transfers received from
    the EU and partly by cheap debt available due to the Euro. Now the party
    is over… And Germany has to pay for it – again (even though it did nit
    celebrate but had it’s own period of austerity 1996-2006 to remain
    competitive on the world market? I would like to help Greece and other
    countries that are currently in serious trouble. But the solution can’t
    always be to let the Germans pay. That’s just not fair.

    I hope a way out of this big mess can be found. And ideally, it would
    not be one that punished the countries that have been prudent in the
    past – or completely wreck countries like Greece (though they are in
    their current mess at least in part by incompetence, corruption and
    shor-sightedness). Hopefully, some sort of “win-win” solution can be
    found.

    By the way: I really don’t think that the whole crisis is part of some
    mysterious German plan to be “the ruler of Europe” or anything like
    that. Germany would be much happier if the periphery wasn’t so close to
    collapse. But they resent having to possibly pay for other countries
    imprudence after they suffered so much through the German austerity
    measures endured 1996-2006. I think, they have a point. Before Germans
    are taxed even more and / or have to work harder for less money to pay
    for the Grrek mess, it would be nice to see the Greek government do what
    it possibly can to help solving the mess they got themselves into. Just
    like the Germans did 1996-2006. It isn’t fun. But necessary. Having an
    inefficient tax system (and being very slow to change that) and hanging
    onto national golf reserves with 35 Billion EUR doesn’t strike me as
    fair when your country is in an emergency like this.

    All this said, I hope there is a way out – and I really like your blog!
    Very interesting thoughts and discussions!

  • @Penny Ciancanelli:
    According to wikipedia, Greece received more Marshall Plan aid per head than Germany. Have a look at the following link, you can find the numbers under “Expenditures”:
    http://en.wikipedia.org/wiki/Marshall_plan

    No doubt the German occupation of Greece was extremely harsh and Nazi Germany behaved in a way that still causes a feeling of shame and deep regret for today’s Germans (by the way: this is unfortunately not only true for Greece but also for Russia, Ukraine, Poland and many other countries).
    But I think you are mixing things up. Blaming today’s crisis of Greece on what Nazi Germany did 66 Years ago is not convincing.
    With similar logic, you could blame it on the Osman Empire or the Ancient Romans. All what happened in history one way or another shaped today’s reality.

    Does Germany have a particular responsibility as the biggest economy in Euroland (and as a particularly keen supporter of European integration – which of course is linked to lessons learned and a feeling of guilt from World War II)? Yes.
    But do today’s Germans deserve being bashed again and again over what Nazi Germany did in the past? No.
    Guilt is a personal thing. The Germans living today (at least the ones aged, say, 75 and under) are not guilty. They cannot be as they were not even born before 1945 (or they were small children).
    Frankly, I think it is understandable that desperate Greek demonstrators are showing swastikas and the like suggesting their debt is somehow somebody else’s fault. And if you don’t know who exactly to blame, then Nazi German y is always a good bet.
    But I believe that it is factually untrue, unfair on today’s Germany and does not help at all in resolving the current crisis. You can’t spit somebody in the face and then ask them for help.

  • @Penny Ciancanelli:
    According to wikipedia, Greece received more Marshall Plan aid per head than Germany. Have a look at the following link, you can find the numbers under “Expenditures”:
    http://en.wikipedia.org/wiki/Marshall_plan

    No doubt the German occupation of Greece was extremely harsh and Nazi Germany behaved in a way that still causes a feeling of shame and deep regret for today’s Germans (by the way: this is unfortunately not only true for Greece but also for Russia, Ukraine, Poland and many other countries).
    But I think you are mixing things up. Blaming today’s crisis of Greece on what Nazi Germany did 66 Years ago is not convincing.
    With similar logic, you could blame it on the Osman Empire or the Ancient Romans. All what happened in history one way or another shaped today’s reality.

    Does Germany have a particular responsibility as the biggest economy in Euroland (and as a particularly keen supporter of European integration – which of course is linked to lessons learned and a feeling of guilt from World War II)? Yes.
    But do today’s Germans deserve being bashed again and again over what it did in the past? No.
    Guilt is a personal thing. The Germans living today (at least the ones aged, say, 75 and under) are not guilty. They cannot be as they were not even born before 1945 (or they were small children).
    Frankly, I think it is understandable that desperate Greek demonstrators are showing swastikas and the like suggesting their debt is somehow somebody else’s fault. And if you don’t know who exactly to blame, then Nazi German y is always a good bet.
    But I believe that it is factually untrue, unfair on today’s Germany and does not help at all in resolving the current crisis. You can’t spit somebody in the face and then ask them for help.

  • @Markus S.:
    It would be great if that kind of plan could work – selling bonds to e.g. the Chinese if they represent money that was simply created by the ECB, with no guarantee whatsoever by the individual countries of the Eurosystem.
    After what the Chinese have experienced with their assets invested in USD, I think they would simply not buy Euro-bonds if they know that there is no enforceable guarantee by the Eurosystem countries (and ultimately the AAA-rated countries) behind it. Why would they be willing to take such a risk without asking for a higher interest rate as compensation? The low interest rate that is the idea behind the Eurobonds only works if the market assesses those bonds to be low-risk. If Germany and the other still solvent countries did not want to take the risk (by avoiding to give a formal guarantee), I doubt the Chinese would. Or am I overlooking anything?

  • Dear Yanis, sorry there is a misunderstanding here: My comment you are refering to was aimed at Penny’s comment who (as I understand it) had suggested that Greece’s current difficulties are due to the lack of Marshall Plan aid (which I believe is factually incorrect, see the link to Wikipedia) and what Nazi Germany had done to Greece. I never meant to imply that you had suggested that. No doubt Nazi Germany’s crimes were absolutely terrible but I believe the current mess has a lot more do with what happened in the last 15 years than what happened 1941-45.

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