Der Freitag - 29.06.2012 | 09:38 16
Sparsam stirbt am schnellsten - Katja Kipping ist Vorsitzende der Partei Die Linke

Die für 2013 in Aussicht stehende europaweite Schuldenbremse untergräbt die Grundlagen der Demokratie und Sozialstaatlichkeit in der Europäischen Union
Die Schuldenbremse ist eigentlich eine Investitionsbremse, ist Kipping überzeugt
Am Freitag wird der Bundestag gegen die Stimmen der Linken den „Fiskalpakt“ beschließen. Er verpflichtet die unterzeichnenden Staaten, eine Schuldenbremse in ihre Verfassungen zu verankern, die weitere Kreditaufnahmen faktisch verbietet. Übersteigt die Verschuldung 60 Prozent des Bruttoinlandsproduktes, sollen sie bestraft werden. Das klingt vernünftig. Wer hat schon gerne Schulden?

Gerne wird von der schwarz-gelben Koalition zur Begründung die „schwäbische Hausfrau“ bemüht. Sie wisse, dass sparen müsse, wer Schulden habe. Doch die Analogie ist falsch. Denn die Schwaben sind nicht nur für ihre Sparsamkeit bekannt, sondern auch für ihre Einfamilienhäuser. Und jeder Eigenheimbesitzer mit Durchschnittseinkommen weiß, dass man dieses nur über einen Kredit finanzieren kann. Die Schuldenquote der Eigenheimbesitzer ist dann in Bezug auf ihr Jahreseinkommen schnell höher, als die der Staaten, die als hochverschuldet gelten. Aber nicht nur Menschen oder Unternehmen müssen manchmal investieren. Das gleiche gilt für Staaten. Straßen, Schulen und Schwimmbäder werden über Jahrzehnte genutzt. Deshalb ist es nur logisch, dass diese Investitionen auch über Jahre finanziert werden.

Staatliche Investitionen führen in der Regel sogar zu mehr Einnahmen. Der Staat investiert in Infrastruktur und Bildung und schafft damit die Voraussetzung, dass Unternehmen Gewinne und Menschen gute Löhne erzielen können. Durch gezielte Investitionen kann der Staat sogar einem Absinken der Einnahmen in einer Krise entgegenwirken. Diese Logik galt übrigens für das Grundgesetz, bis diese Regelung durch die Schuldenbremse ersetzt wurde.

Kritisch wird es für den Staat erst, wenn seine Einnahmen zurückgehen – so sind die Spitzensätze der Einkommenssteuer in den USA von 1950 bis heute von 90 Prozent auf 35 Prozent, in Deutschland von 95 Prozent auf 45 Prozent und in Frankreich von 60 Prozent auf 40 Prozent gesenkt worden. Diese seit Jahrzehnten betriebene Politik des Einnahmeverzichtes ist letztlich der Grund für die Schuldenkrise der Staaten. Doch von einer stärkeren Besteuerung von Reichtum ist heute kaum die Rede.

Der Finanzmarktindustrie ist gelungen, ihre falsche Erzählung über die Ursache der Krise durchzusetzen. Sie wird nun nicht mehr als Krise der Finanzinstitute und ihrer Fehlspekulationen wahrgenommen, sondern als Staatsschuldenkrise. Dabei sind die tatsächlichen Ursachen der Krise am besten mit drei U zu beschreiben:Ungleichgewichte in den Leistungsbilanzen, Ungleichgewichte bei der Vermögensverteilung und die Unterregulierung der Finanzmärkte. Einige Fakten zur Verdeutlichung: Die reichsten zehn Prozent der Bevölkerung verfügen in Deutschland über 62 Prozent des Vermögens, die restlichen 90 Prozent der Bevölkerung müssen sich den Rest teilen. Die Schattenbanken, auch bekannt als Hedgefonds, haben inzwischen einen finanziellen Umfang, der den der normalen Geschäftsbanken nahekommt. Der deutsche Leistungsbilanzüberschuss der Exportnation Deutschland beträgt 170 Milliarden Euro.
Unverbindliche Lyrik

Den Fiskalpakt als „Schuldenbremse“ zu bezeichnen, ist ein Euphemismus. Treffender ist, ihn als Investitionsbremse zu bezeichnen. Das faktische Investitionsverbot ist volkswirtschaftlich kontraproduktiv. So als würde man einem Unternehmen verbieten, in neue Maschinen zu investieren und es zwingen, weiter mit nicht mehr wettbewerbsfähigen Maschinen zu arbeiten. Die Folge ist klar: Die Pleite wird wahrscheinlicher, nicht unwahrscheinlicher. Der Fiskalpakt wird die Bundesrepublik zwingen, jährlich 25 Milliarden Euro einzusparen. Die Arbeitsgruppe Alternative Wirtschaftspolitik weist übrigens darauf hin, dass hierzulande ein zusätzlicher Investitionsbedarf von mindestens 75 Milliarden Euro pro Jahr besteht. Bei konsequenter Umsetzung der Schuldenbremse setzt das eine extreme Erhöhung der Steuereinnahmen voraus, die nicht mit einer europäischen Transaktionssteuer oder einer leichten Erhöhung der Einkommensteuer zu erzielen ist. Der Fiskalpakt wird also notwendige Investitionen verhindern und in Sozialabbau führen.

Da zur Verabschiedung des Fiskalpakts eine Zweidrittelmehrheit benötigt wird, hätten SPD und Grüne ihn verhindern können. Doch die SPD hat mit ihrer Zustimmung eine Richtungsentscheidung für eine Große Koalition mit der CDU getroffen. Ihre K-Frage wird zur V-Frage: Statt eines Kanzlerkandidaten nominiert sie nur noch Vizekanzlerkandidaten. Beschämend ist auch das Agieren der Grünen, die sich ihre Zustimmung für das Versprechen auf eine Finanztransaktionssteuer und einen Beipackzettel mit viel unverbindlicher Lyrik abkaufen ließen.

Hätte die SPD international agiert und im Bündnis mit dem französischen Präsidenten François Hollande auf eine Nachverhandlung des Fiskalpaktes bestanden, wäre dies eine Chance für eine Beendigung der neoliberalen Politik in Europa gewesen. Doch stattdessen handelt die SPD wie ein kleiner Koalitionspartner Merkels. Wer den verschuldeten Ländern wirklich helfen will, der muss die europäischen Leistungsbilanzen ausgleichen, die Zinskosten für Staaten durch Direktkredite der Europäischen Zentralbank senken, die Banken regulieren und für höhere Steuereinnahmen sorgen.
Postdemokratische EU

Ein Einwand der Befürworter des Fiskalpakts lautet: Die Schuldenbremse stünde schon im Grundgesetz. Dem ist zu entgegnen: Sollten sich einmal die Mehrheitsverhältnisse ändern, dann könnte eine Zweidrittelmehrheit die Schuldenbremse wieder streichen. Aber aus dem völkerrechtlich verbindlichen Vertrag über „Stabilität, Koordinierung und Steuerung der Wirtschafts- und Währungsunion“ kann Deutschland nicht einseitig austreten.

Der Fiskalpakt manifestiert den postdemokratischen Zustand der europäischen Gesellschaft. Der von oben verordnete Sparzwang erhält auf einmal europaweit Verfassungsrang. Der europäische Demos wird nicht gefragt. Eigentlich hätte der Fiskalpakt eine Modifikation der europäischen Verträge nötig gemacht. Aber die Exekutiven haben den Fiskalpakt am Europarecht vorbei als völkerrechtlichen Vertrag durchgesetzt. Mit dem Fiskalpakt steht der Kontinent, auf dem einst das Demokratieprinzip geboren wurde, vor einer autoritären Wende. Was jetzt auf dem Spiel steht, ist der Kern der Demokratie, nämlich, dass Parlamente über die Verwendung von Steuern, über Investitionen und Einsparungen eigenständig entscheiden. Setzt sich die Logik des Fiskalpakts durch, vollziehen die Parlamente letztlich nur noch die neoliberale Spardoktrin. Die Demokratie wird in eine Zwangsjacke der Alternativlosigkeit gesteckt. Sie wird zu einer Veranstaltung von Technokraten, bei der einzig darum gestritten werden darf, wer am effektivsten spart, wer Frauenhäuser, Universitäten und Sozialsysteme am besten zusammenstreicht. Mit dem Fiskalpakt haben die Neoliberalen ihr ökonomisches Paradigma in Marmor gemeißelt.

Das Projekt Europa steht am Scheideweg. Mit dem Fiskalpakt werden die Weichen in Richtung Sozialabbau gestellt. Der Euro wird scheitern. Eine gemeinsame Währung kann die verstärkten sozialen Unterschiede in Europa einfach nicht aushalten. Um das zu sehen, muss man kein Linker sein. Selbst der US-Präsident Barack Obama kann dem Sparkurs nichts abgewinnen. Die Linke wird deshalb gegen Fiskalpakt und EU-Rettungsschirm klagen. Beide sind mit unseren Vorstellungen von Demokratie und Sozialstaat nicht vereinbar.
Ein Vertrag, der so stark in die demokratischen und sozialen Rechte eingreift, sollte nur per europaweiter Volksabstimmung beschlossen werden. Zwei Alternativen könnten zur Auswahl stehen. Zum einen der Fiskalpakt, also Investitionsbremse und Sozialabbau. Diesen Weg möchte Schwarz-Gelb gemeinsam mit Rot-Grün einschlagen. Oder zum anderen eine Politik, die an der Wurzel der Krise ansetzt und endlich eine europäische Wirtschafts- und Sozialunion auf den Weg bringt. Dafür ist eine Umverteilung von oben nach unten und über eine couragierte Regulierung der Finanzmärkte unabdingbar.

So eine Abstimmung könnte auch einen positiven Aspekt verstärken: Lange galt die EU als ein Projekt der Bürokraten in Brüssel. Die Öffentlichkeit konzentrierte ihre Aufmerksamkeit vor allem auf das eigene Land. Doch immer mehr Menschen blicken über den nationalen Tellerrand. Die Wahlen in Griechenland und Frankreich wurden auch in Deutschland mit großem Interesse verfolgt. Namen wie Alexis Tsipras und François Hollande sind in aller Munde, als handle es sich um Fußballstars. Eine europäische Öffentlichkeit und ein europäischer Demos sind auf einmal da. Sie sind der Hoffnungträger für eine soziale und demokratische Erneuerung der EU. Vorerst werden sie die europäische Idee vor dem Fiskalpakt verteidigen müssen.

Schuldenkrise Befreiungsschlag Vermögensabgabe - Die Zeit 13-7-2012

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Selten hat eine Studie des Deutschen Instituts für Wirtschaftsforschung (DIW) ein so großes Aufsehen erregt wie unser Bericht zu einer Vermögensabgabe und Zwangsanleihen. Der zentrale Gedanke ist schlicht und ergreifend: Weltweit steht den staatlichen Schulden ein Mehrfaches an privatem Vermögen gegenüber. Ein Großteil dieser Vermögen entfällt auf die reichsten zehn Prozent der Bevölkerung, in Deutschland sind es sogar rund zwei Drittel der gesamten Vermögen. Selbst eine Abgabe in geringer Höhe kann schon ein beträchtliches Aufkommen erzielen – und den Staat bei den Bürgern entschulden.
....
Geht es auch ein paar Nummern kleiner? Dass wir mit unserem Vorschlag nicht den Ludwig-Erhard-Preis gewinnen würden, hatten wir schon vorher geahnt. Der Kollaps der Finanzindustrie, die nachfolgende Finanz- und Wirtschaftskrise und die Europäische Schuldenkrise waren allerdings in den gängigen Modellen der Ökonomenzunft auch nicht vorgesehen. Da sind unorthodoxe Lösungsvorschläge gefragt.

Doch zur Sache: Einige der Kritiker beklagen die Pläne für zusätzliche Zwangsabgaben und verweisen auf die Möglichkeiten, Reiche über normale Steuern an den Kosten zu beteiligen. Doch auch Steuern sind Zwangsabgaben ohne Gegenleistung (§ 3 Absatz 1 Abgabenordnung). Jede Steuer ist im Grunde eine Enteignung. Dafür bekommt der Bürger mehr oder weniger gute Leistungen des Staates. Zum Beispiel eine Garantie für die Spareinlagen durch die Bundeskanzlerin oder einen Bail-out für notleidende Banken. Ist da eine einmalige Versicherungsprämie von zehn Prozent auf die Pro-Kopf-Vermögen von mehr als 250.000 Euro zu viel verlangt?

Ein Staatsbankrott träfe die Reichen noch härter
Hinzu kommt: Die Staatsschulden von heute sind die Steuern von morgen. Wer die wann und wie bezahlen soll, ist letztlich eine politische Frage. Man kann auch die Mehrwertsteuer erhöhen, wie es der Sachverständigenrat für seinen Schuldentilgungspakt vorschlägt, oder die Ökosteuer. Dann zahlen aber vor allem die kleinen Leute. In den vergangenen 15 Jahren wurden hohe Einkommen und Vermögen steuerlich entlastet und die Konsumsteuern erhöht. Gleichzeitig sind nur die hohen Einkommen nennenswert gestiegen und die großen Vermögen entsprechend gewachsen, während die Masseneinkommen stagnierten und die Niedriglöhne gesunken sind. Ist da eine einmalige Abgabe von zehn Prozent auf persönliche Vermögen von mehr als 250.000 Euro wirklich zu hoch?

Vor allem sollten die Kritiker berücksichtigen: Staatspleiten und ein unkontrolliertes Auseinanderbrechen der Euro-Zone würden die deutschen Auslandsvermögen spürbar entwerten, die Finanzmärkte längere Zeit zum Erliegen bringen und Deutschland in eine schwere Rezession stürzen. Das würde die Vermögen der reichsten zehn Prozent sicher mehr als zehn Prozent kosten – von den Folgewirkungen der Krise auf die breite Bevölkerung einmal ganz zu schweigen. Das gleiche gilt für eine schleichende Inflation in Kombination mit niedrigen Zinsen (financial repression), wie sie sich für die nächsten Jahre abzeichnet. In der Euro-Zone ist eben einiges schlecht gelaufen, aber da muss man jetzt durch.

ANGELA MERKEL, the German chancellor—and also, in effect, the euro area’s boss—has always insisted that she wants to preserve the euro area in its current form.
But as the euro crisis intensifies and the potential bills for Germany mount, she would be imprudent not to be considering a Plan B.
Drafted in utmost secrecy by a few trusted officials for the chancellor’s eyes only, this is what the memorandum outlining a contingency plan might say.

TO: Angela Merkel
SUBJECT: Plan B

THE CURRENT IMPASSE

I. Since the euro crisis started over two years ago you have said that Germany will defend the single currency, based on your conviction, shared by business and the political class, that its survival is in our national interest. To that end Germany has pledged large amounts of public money, both in our contributions to various rescue funds and through the Bundesbank’s share of risks taken by the European Central Bank (EC. At the same time you have tried to minimise the bill for German taxpayers by insisting that bailed-out states implement strict austerity programmes and, more generally, by resisting calls for debt mutualisation—code for Germany underwriting the euro area—while demanding greater central control over all national budgets.

II. Bluntly, the plan isn’t working. Greece is a disaster zone. Ireland and Portugal are making some progress (it was encouraging that Ireland was able to raise some money from the markets in July) but they still have a long way to go and could easily be knocked off course. Worse, Spain looks as if it may need a full bail-out rather than the partial one for its banks you had hoped would suffice. And Spanish sickness is infecting Italy, undermining all the good work that Mario Monti has been doing since the Italians saw sense and got rid of Silvio Berlusconi, as you had been urging behind the scenes. Meanwhile François Hollande isn’t doing enough to get France into shape and is playing the usual French game of calling for Germany to do more while resisting your attempts to centralise control at the European level. Mario Draghi, the ECB’s president, has calmed things down for the moment, but his plan could easily come unstuck.

III. The position is dangerously unstable. If capital flight from the peripheral economies gathers pace, it could trigger runs on entire banking systems. That would put the ECB—and thus, indirectly, the Bundesbank and Germany—on the hook for deposits worth trillions of euros. The domestic politics are already ugly in several countries, notably Greece. This is poisoning our position in southern Europe, where our help is increasingly seen as a new form of German tutelage. The situation is deteriorating in Germany, too, where your ability to act is being limited by a backlash against bail-outs and against the euro itself. If anything, the backlash in Finland and the Netherlands is even more vicious.

THE CASE FOR PLAN B

IV. Hence the need to consider an alternative strategy. The aim of this contingency plan is not the complete break-up of the 17-country euro area. That would be against the German national interest, destroying the hard-won respect we have achieved since the second world war by embracing European integration. And it would needlessly damage our economy by bringing back currency risk for trade with countries such as Austria and the Netherlands, which have adapted perfectly well to the euro. Plan B seeks to save the euro by surgery, excising states that cannot cope rather than clinging to the vain hope that they can regain their health within the euro zone.

V. We propose two options. First, the one that may be forced on you anyway: an exit by Greece arising from gross dereliction of its duties under the various bail-out agreements. We have taken as a given that MPs in the Bundestag will not sanction a single euro more in bail-out money to Athens. If that forces the Greeks out, so be it. Second, we also consider a wider exit of other countries that have failed the euro test. We think this should include all the states that have already been rescued, or are requesting bail-outs, because those countries share with Greece a fundamental loss of competitiveness and vulnerability to foreign capital flight. This means that they cannot be cured within a reasonable period of time while staying within the euro.

VI. In assessing the two options we have relied mainly on a cost-benefit analysis. That has been informed, where relevant, by historical precedents and the legal position (we are well aware of your concern that Germany must at all times be seen as law-abiding). We also look briefly at some of the practical issues involved in an exit. Naturally, we have taken into account the political constraints you face both at home and among your fellow European leaders. Caution is your watchword, so we’ve highlighted the risks of things going wrong if you adopt Plan B.

CAN AN EXIT HAPPEN IN THE FIRST PLACE?

VII. We start with the most basic question of all: can one or more countries leave (or be forced out of) the euro, both legally and practically? As a matter of legal principle, the answer is no, because when countries joined the euro the conversion of their former currencies was supposed to be “irrevocable”: a Hotel California that you can never leave. Indeed, a legal opinion published by the ECB in 2009 argued that because European treaties did not conceive of the possibility of a country leaving the euro, an exit would require them to leave the European Union (EU) as well. That would exacerbate the economic pain because the departing state would lose access to both the single market and valuable regional-support funds.

VIII. But we think this argument of legal impossibility is overstated. European laws are in constant flux because of the ease with which new agreements can supersede old ones. The Maastricht treaty of 1992 banned bail-outs, but you have yourself authorised two agreements allowing them: the temporary rescue fund and the permanent European Stability Mechanism, whose legality our constitutional court is considering at the moment. Similarly, we think that it will be possible to find a way round the supposedly binding rule that a country exiting the euro would also have to leave the EU.

IX. What about the practical obstacles to an exit? There are two main ones. First, it would take several months to design, print and distribute an entirely new currency, leaving a departing country bereft of new cash. Second, news of a country leaving or being ejected would almost certainly leak, prompting bank runs so massive that they would overwhelm even the ECB’s ability to counter them. That would lead to a total (and chaotic) break-up rather than a controlled one.

X. We think it will be possible to deal with both these practical difficulties. Yes, it took six months to launch a new currency when, for example, the Czech-Slovak monetary union broke up in 1993. And yes, they were able to overstamp existing notes as either Czech or Slovak—something that would not work for a country like Greece, which relies so heavily on euros spent by tourists. But modern economies have become much less reliant on cash than they used to be. We think a country could get by for a few months through enhanced use of electronic payments (which might also flush out more of the black economy) and by using existing euro notes and coins for small transactions, as proposed by Roger Bootle, the head of Capital Economics, a consultancy, who recently won a competition set by Lord Wolfson, a British businessman, on how one or more countries might leave the euro.

XI. The worry about bank runs is more justified, but we think it too can be overcome. The most obvious way would be to keep the exit decision completely secret until the weekend it was implemented. That is tricky, because you would need to convince other European leaders ahead of a council meeting, and news would be bound to leak. But if the news did get out, then a state leaving the euro could immediately impose an extended bank holiday and implement capital controls (normally illegal under European law, but there is a get-out clause for up to six months in exceptional circumstances). That should deal with the problem.

AN EXIT OF GREECE ALONE

XII. Assuming the legal and practical hurdles to an exit by any state can be surmounted, then the first option is for Greece to leave, which on the face of it looks less risky than a bigger break-up. One immediate difficulty is that the Greeks don’t want to go, so they would have to be expelled. There are two ways they could be forced out: first, by cutting off the flow of bail-out funds, which would mean that the Greek government would have to meet its deficits by issuing IOUs that would start to circulate as a de facto parallel currency, trading at a discount to euros; second, by cutting Greek banks off from refinancing from the ECB and its payments system. The first approach might take some time but would create such monetary chaos that a clean break would eventually seem preferable. The second would force the issue since the banks would collapse without access to ECB liquidity.

XIII.What would happen then? Even if Greece did slide towards the exit rather than jumping, at some stage the government would have to complete the process by introducing the new drachma one weekend when the markets were closed. All assets, debts and contracts written under domestic law, including bank deposits and loans, would be redenominated one-for-one from euros to drachmas. Crucially, the moment the markets reopened, the drachma would depreciate, probably by more than 50%.

XIV. That devaluation, if not squandered in a lurch towards hyperinflation, could deliver Greece from its current misery of perpetual recession by letting it regain lost competitiveness at a stroke, rather than by grinding down domestic costs over several years. That should swiftly deliver a hefty boost to the sagging economy from net trade. But what would it mean for Germany?

XV. First, you can count on the move being popular—and not just in Germany—making it feasible to win support from other European leaders whose electorates are just as fed up with the feckless Greeks. Second and vitally, expelling Greece would draw a line under the costs of bailing it out and prevent it from becoming a permanent drain on German taxpayers. Third and scarcely less important, the decision would give bite to conditionality, sending a stern lesson to the rest of Europe that bail-out terms cannot be flouted with impunity.

XVI. Set against these benefits there will be costs. From a strategic perspective, there is the danger of Greek politics souring still further and the country becoming a permanent trouble-spot in the eastern Mediterranean, even if it is out of the euro. To fend off that possibility it will be essential to show goodwill by keeping Greece in the EU. So it will in fact need a third bail-out (only we will call it an aid package) to pay for things like essential drugs for patients. We think this could be capped at, say, €50 billion ($60 billion) of which Germany would chip in a third, or around €17 billion.

XVII.That will be just the beginning. Drawing a line also means ending the fiction that our loans to Greece will be repaid in full. Germany, along with other European creditor nations, will face hefty losses (see chart 1) arising from our exposure to Greece. First, there is the money already disbursed: almost €130 billion. Second, the ECB still owns Greek government bonds worth some €40 billion. Third, the Bank of Greece owes the ECB about €100 billion in so-called Target2 debts, which have arisen through the Target2 payments system as local banks made up for the drain of deposits out of Greece by borrowing from the central bank. That adds up to an exposure of over €270 billion, or 3% of euro-wide GDP. (We don’t include the indirect exposure we all have through our stakes in the IMF, which has lent Greece about €20 billion, since the IMF usually gets its money back).

XVIII. Some of that €270 billion might be recovered, but it would be irresponsible to bank on any of it. The devaluation would increase—in drachma terms—Greece’s euro indebtedness. That will force the Greek government wherever possible to redenominate its liabilities into drachma, inflicting heavy losses on creditors; and it may follow that up with a further write-down. Prudence suggests that we should assume no recovery and that Germany will be on the hook for a third of European losses—more than its formal share of just over a quarter, on the assumption that the other bailed-out states won’t be able to pay anything at all. That would cost Germany €90 billion, raising the bill (including the aid package) to almost €110 billion. On top of this taxpayers might have to stump up €10 billion to support German banks as they wrote off their claims on Greece. Assuming that the state picked up half the resulting losses, this would take the total German bill to nearly €120 billion, or 4.5% of GDP.

GOING FOR BROKE

XIX. If that was that, it would be a bargain compared with the likely present value of transfers from Germany to Greece over the next few years and maybe decades. But there is a sizeable risk that a Grexit could turn into a calamity, as markets reacted badly to the admission that euro membership was no longer irreversible. At worst there could be a market collapse to rival the one that took place after the Lehman bankruptcy in late 2008, which could in turn trigger a recession on the scale of the desperate downturn of 2008-09. In the panic, you would come under intense pressure (Barack Obama would be on the line immediately) to concede debt mutualisation without getting the quid pro quo of fiscal control at a European level that you have been demanding. After holding out for so long against demands that you write a blank cheque, that is what you might well end up having to do.

XX. Given the risk that Germany might have to pay such a heavy price for a Greek exit, does that mean Plan B is a non-starter? Not necessarily. Another conclusion might be that the seemingly safer scenario of an exit by Greece alone is in fact the riskier option. If Germany is going to have to make big concessions to deal with the exit of one state, it might make more sense to make such concessions in conjunction with more radical surgery that really gets to grip with the euro crisis. Altogether, five out of the 17 member states have been rescued or asked for a bail-out—testimony to the fact that they have not been able to cope with the rigours of the single currency. The other four—first Ireland, then Portugal, and now Spain and Cyprus—are also teetering in the relegation zone. Expelling them too might be better for them, for the euro and for Germany, because it would make the remaining euro area more viable.

XXI. The plight of the other four economies reflects private debt (especially in Cyprus, Ireland and Spain) as much as public debt (which was clearly at fault in Greece and to a lesser extent in Portugal). But the fundamental weakness that they all now share with Greece is that they owe foreigners far more than they own abroad. In each of the five countries, external liabilities exceeded domestically owned foreign assets by between 80% and 100% of GDP in 2011, putting them in a league of their own within the euro area (see chart 2). Italy, by contrast, has low net external liabilities worth only 21% of GDP (lower than America’s 27%).

XXII. External-debt levels are far higher in the five countries than in emerging economies that have fallen victim to “sudden stops”, in which foreign investors and banks stop lending and try to pull out their money. Small wonder that the markets have lost confidence in them. But even though bail-out loans can shield governments, that loss of confidence continues to undermine the peripheral economies, as foreign deposits are withdrawn and foreign investors refuse to buy their debt. Central-bank funding is plugging the gap, but that makes banks worryingly beholden to the ECB, causing them to clamp down on their lending to firms and households. This squeezes the economy even more tightly and makes it harder to get the public finances in order.

XXIII. As well as being burdened by unsustainable levels of external debt, all five economies share the misery of trying to regain lost competitive ground through internal devaluation, in which domestic costs are ground down year after year. With the exception of Ireland, which has achieved a worthwhile reduction in its unit labour costs (though after the biggest rise of all), you could hardly select a group of countries less able to make a success of internal devaluation. Labour markets in southern Europe are notorious for protecting insiders (permanent workers) at the expense of outsiders (employees on temporary contracts or the unemployed). This rigidity means that firms cut their labour costs through hiring freezes and by sacking temporary employees, rather than by reducing pay rates.

XXIV. Some progress is being made, but as in a marathon, it is the second half of the race that is the most agonising. Unemployment has already risen to perilously high levels: around 15% of the workforce in Ireland and Portugal and 25% of the workforce in Spain. Ireland has been running a small current-account surplus and deficits have generally fallen (though they remain very high in Cyprus and Greece) but they would be far worse if the peripheral economies were not so depressed, which has slashed demand for imports.

XXV. What this suggests is that if Greece has to depart, it should not go alone. Like Greece, the other four bail-out countries would gain from the swift improvement in competitiveness that currency devaluations would achieve, provided credible policies were pursued to ensure it was not frittered away in runaway inflation. And if politics can trump the law for Greece, then the same should be true for all five countries, allowing them to stay in the EU and retain access to the single market.

XXVI. Such a move would of course come as a tremendous shock, and it would be essential to protect Italy and France at once by making far-reaching concessions that shift the remaining euro area towards mutualisation of debt and the creation of a banking union. But that would be less of a setback for Germany than before, because in principle there should be less need for burden-sharing in a more viable monetary union. Indeed, the most important potential benefit of this bigger break-up is that it could bring the euro crisis to a decisive end by restoring confidence in a smaller but sturdier single-currency area.

XXVII. In addition, a line would have been drawn under potentially much higher costs by preventing the bail-outs from becoming a permanent flow of transfers. This is what happened in Germany after reunification and is still happening. Recent research by the IMF shows that the flow of money to the poorer German states has created a form of benefit dependency. The German public’s big fear is the same outcome, writ large, across the euro area. For example, a transfer union across the existing single-currency zone based on the Canadian model would seek to make governments’ revenues more equal. Transferring cash so that the poorest governments (including Greece and Spain) had a level of revenue close to that of a mid-tier but still below-average country like Ireland could involve annual transfers of €250 billion—of which €80 billion would need to come from Germany, around 3% of its GDP.

XXVIII. In the short term, however, the cost of a five-country exit would clearly be much heavier than that of a Grexit. Although the other four departing states would be in a less desperate condition than Greece, they might also need some aid to smooth the way—a further €100 billion, say, of which Germany’s share would be €33 billion. The additional exposure through official loans would be bearable because the other four bail-outs were individually much smaller than Greece’s. Altogether euro-area governments have made commitments approaching €200 billion—the same as to Greece—but actual disbursements have been less than half that. The big exposure lies in the euro system. The ECB is estimated to hold an additional €80 billion of Irish, Portuguese and Spanish bonds bought over the past two years to calm markets. In addition, it has claims on the other four countries through the Target2 system of around €600 billion.

XXIX. That would bring the cost arising from an exit of all five countries to €1.15 trillion, of which Germany’s share would be €385 billion, or 15% of its GDP. The additional expense of bank bail-outs would increase this to €496 billion, or 19% of GDP, lifting German government debt from 81% of GDP in 2011 to 100% and imperilling Germany’s triple-A credit rating. German non-financial firms and individuals would also take a big hit on their claims of over €200 billion in the five economies.

XXX. The biggest risk associated with this scenario is that the moves towards debt mutualisation and a banking union might not, after all, be enough to stabilise the remaining euro area, resulting in a total break-up of the euro zone and triggering a savage recession with hugely damaging economic consequences. Markets invariably ask “who’s next?” and there is an obvious answer. Italy might not need to leave the euro on grounds of its net external liabilities, and its primary budget (ie, before interest payments) is under control. But its public-debt burden of 120% of GDP is the second-highest (after Greece’s) in the euro area. And it is mired in recession again. Like Greece, Italy has found it hard to live with the single currency. Growth has been dismal over the past decade (Mr Berlusconi was an economic calamity) and unit labour costs have risen sharply. The task of restoring Italian competitiveness would be far harder once the five departing economies had adopted new, much cheaper currencies.

XXXI. The more that markets fretted about Italy, the more they would also fret about France, given its strong trading and financial links with Italy. Given all this, it would be very difficult for Germany to get support in the European Council for this more drastic plan. The political obstacles to co-ordinating a solution that keeps the euro area intact may seem insuperable, but getting agreement for a planned ejection of five countries would be even more daunting.

CONCLUSION

XXXII. Of the two options, our judgment is that the larger break-up makes more overall economic sense than an exit of Greece alone. But we must emphasise that the economic and financial risks of it going wrong are much greater, and pushing it through would be an order of magnitude more difficult than co-ordinating an exit by Greece alone. Finally, a drawback associated with both options, even if they were to work, is that many of the benefits would lie in the future (by not having to make transfers to peripheral Europe) whereas the costs would be felt here and now—and blamed on you and your government.
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A note attached to this memorandum by a member of her staff indicates that after reading it, Mrs Merkel thought long and hard about how to respond. She is a scientist by training, a politician by vocation and, most important of all, a cautious person by temperament. After much deliberation she concluded that despite the advantages of Plan B compared with her current strategy, she was unwilling to countenance the associated risks—at least for the moment. She ordered the memo to be shredded, resolving that if the euro area is to fragment, it will not be at her behest. But the staff member who was told to destroy the memo thought it might be useful to keep Plan B in reserve just in case. Plucking it from the shredder, he filed it away instead. No one need ever know that the German government had been willing to think the unthinkable. Unless, of course, the memo leaked…