A New Plan B for the Eurozone: Guldenmark - a stability anchor
As the latest summit of European leaders failed yet again to present any new strategy to combat the deeping euro-zone crisis and while the danger of a collapse of common currency is growing day by day as the Spanish banks are runnig out of cash, it is a high time for a viable PLAN B: the reorganisation of the Eurozone and the introduction of a GULDENMARK for Euro countries with a current account surplus. German Professor of public finance and political economy Dr. Markus Kerber, known for his legal challenge against the EU bailouts in Germany, has worked for the last months on this NEW plan with a team of leading European experts and in cooperation with New Direction – The Foundation for European Reform.
Brussels, 29 May 2012 – Whilst unconditional supporters and unconditional opponents of the Euro continue to espouse their views that there is no alternative but to save or abolish the Euro, Professor Kerber aims to steer the discussion in a completely new direction with his proposal for an "historical compromise". According him, Guldenmark is the answer to the widespread economic inequality in the monetary zone.
„Those who seek to save the European project must allow Euro countries with current account surpluses to introduce a parallel currency,” says Professor Markus C. Kerber, economist and constitutional lawyer and founder of the interdisciplinary think-tank Europolis. "One must be prepared to tread unusual paths. Massive rescue packages are not the solution, as they merely mask the severity of the situation."
"Following the infinite and inconclusive EU summits, it is time for a fundamental solution to the euro crisis," adds Vice-President of New Direction Derk Jan Eppink MEP.
The idea of introducing the Guldenmark as the necessary "stability anchor" in the Eurozone forms part of Professor Kerber’s latest study: "More competition needed: A reformist concept for a new European monetary union". Countries with a current account surplus, i.e. Germany, the Netherlands, Finland, Austria and Luxembourg would introduce a second currency which would function as legal tender alongside the Euro.
Its introduction would have according to Kerber many benefits. The decisive factor is, however, that the Guldenmark would soon to be revalued in relation to the Euro so that repayment of the accumulated Euro debt would be made easier.
"If serious thought is being given to the exit of a country like Greece as a result of the current Euro crisis, then it seems obvious that a group of countries which no longer wishes to gamble its fiscal solvency should be allowed to exit the Eurozone as a single currency monetary area," explains Kerber.
The Berlin-based lawyer knows his idea faces criticism from some quarters. "In rejecting the concept of a parallel currency out of hand, however, you need to provide evidence of how the path to a transfer union, in terms of the increasing heterogeneity and the growing, unpredictable financial need of many European Economic Union member states can be blocked," says Kerber. As far as Kerber is concerned the new parallel currency is not an alien concept: “Instead, it represents the logical conclusion to the failure of the Euro experiment. All in all the current difficulties are about more than a currency. The crisis threatens the entire European project,” conludes Kerber.
Note to Editors
Europolis is a German initiative aiming at a new approach to European policy. Europolis’ ambitions are: daring more competition, ensuring institutionally the stability of currency and prices, advancing the consolidation of public finances and giving priority to the principle of subsidiarity. The completion of the single European economic market is not possible without the competition of bold ideas.
More information at: www.europolis-online.org
New Direction - The Foundation for European Reform is a free market think-tank established in Brussels in 2010 to add innovative ideas and encourage reform efforts in Europe. Together with a strong network of partner think tanks around Europe, New Direction produces original and relevant research papers focusing on the most pressing issues in the area of economic growth, competition, financial regulation, energy security, taxation, agricultural policy, bureaucracy and EU institutional affairs.
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