EU banking union disunites German economists

by Urs Birchler and Monika Bütler

Vox
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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