Presently the euro does not appear to have many friends. Almost every day (self-acclaimed) experts are telling us that our currency is doomed to collapse. At the same time, the narrative of the crisis in the euro area is shrouded in errors and myths. Myths are simplified descriptions, which while giving the appearance of accuracy, are in fact far from reality. We, a group of Austrian and German social democrats based in Brussels, intend to demystify the crisis by means of this little pamphlet. Our goal is to overcome popular misconceptions simply by presenting facts. Facts allow for ideologies to be unmasked, provide the basis for a correct diagnosis and are helping to design effective and sustainable policy solutions.
Given the origin of the authors, we adopt an Austrian-German perspective. Despite their differences, Austria and Germany often find themselves in the same policy camp, together with the Netherlands and Finland. However, we do not accord to the logic of a fundamental clash of interests between ‘core and periphery countries’. On the contrary, we firmly believe that the current problems in the euro area can only be solved in a sustainable manner if northern and southern Europe develops a common understanding of the crisis. More importantly, we need to overcome partisan politics and inside-the-box thinking. In this respect, we let facts prevail and focus on ten particular myths:
1. Leaving the euro is the best solution
2. The euro is in crisis
3. Public debt is to blame for everything
4. There is no alternative to austerity
5. We are living beyond our means
6. Crisis countries are reform laggards
7. The printing press is causing inflation
8. Financial aid is only delaying bankruptcy
9. They only want our money
10. The worst is behind us
Subsequently, we propose a comprehensive solution.
Read more soon on my blog.