Σε βάλτο ανεργίας παραμένει η χώρα, με 23,6% στο β’ τρίμηνο

Καθημερινή
13 Σεπτεμβρίου 2012

Στο 23,6% εκτοξεύθηκε η ανεργία στη χώρα το β΄ τρίμηνο εφέτος, κατά 7 και πλέον μονάδες υψηλότερα από το αντίστοιχο τρίμηνο του 2011 (ποσοστό 16,3%) και από 22,6% το α΄ τρίμηνο εφέτος.

Οι άνεργοι ανήλθαν σε 1.168.761 άτομα, καθώς τον τελευταίο χρόνο περίπου 1.000 πολίτες κάθε ημέρα χάνουν την εργασία τους (β΄ τρίμηνο πέρυσι, 810.821 άτομα).

Εφιαλτικά είναι τα στοιχεία για τους νέους 15- 24 ετών, όπου η ανεργία έφτασε στο 53,9% και ειδικά για τις νέες γυναίκες, στο 62,1%. Σοκ, επίσης, προκαλεί το γεγονός ότι οι μακροχρόνια άνεργοι (που αναζητούν εργασία πάνω από ένα έτος) έφτασαν στο 59% του συνόλου των ανέργων, ενώ ειδικά στη Δυτική Μακεδονία περίπου ένας στους τρεις είναι άνεργος (ποσοστό ανεργίας 30%).

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Aπόφαση-σταθμός στη Γερμανία

του Τάσου Τέλλογλου

Καθημερινή
13 Σεπτεμβρίου 2012

Με την προσπάθεια να περιορίσει τη συμμετοχή της Γερμανίας σε μία οροφή της τάξεως των 190.024.800.000 ευρώ, το συνταγματικό δικαστήριο απέρριψε τις αιτήσεις ασφαλιστικών μέτρων για να αποτραπεί η υπογραφή από τον πρόεδρο της Ομοσπονδιακής Δημοκρατίας της Γερμανίας του νόμου που προηγουμένως είχε ψηφίσει η Βουλή για την κύρωση της συνθήκης του μόνιμου μηχανισμού στήριξης (ESM) της Ευρωζώνης.

Το δικαστήριο απέρριψε τις αιτήσεις, βρίσκοντας κατ’ αρχήν ότι τίποτα δεν εμποδίζει την υπογραφή του νόμου, διατύπωσε ωστόσο την άποψη ότι «η Oμοσπονδιακή Δημοκρατία της Γερμανίας θα πρέπει να εκφράσει πως δεν δεσμεύεται από τη συνθήκη για τον μόνιμο μηχανισμό στήριξης αν οι επιφυλάξεις της αποδειχθούν ανίσχυρες».

Στο ερώτημα με ποιον τρόπο θα διασφαλίσει η γερμανική Βουλή τον έλεγχο του μηχανισμού, το δικαστήριο σημείωσε ότι το γερμανικό Σύνταγμα δεν αντιμετωπίζει το θέμα αφήνοντας στην κυβερνητική πλειοψηφία «χώρο» να διαμορφώσει αυτό τον μηχανισμό. Ταυτόχρονα, όμως, προειδοποίησε ότι θα αποφανθεί για το ζήτημα αναλυτικότερα στην ουσία την προσφυγών –χθες ανακοινώθηκαν οι αποφάσεις μόνο για τα ασφαλιστικά μέτρα– ενώ επισήμανε ταυτόχρονα ότι τα δικαιώματα του Kοινοβουλίου εξυπηρετούνται κατά τον καλύτερο τρόπο όταν αποφασίζει για παρόμοια ζητήματα η ολομέλεια και όχι η Eπιτροπή Oικονομικών Yποθέσεων. To δικαστήριο, όμως, αποφαίνεται σαφώς ότι κάθε αύξηση της γερμανικής συμμετοχής στον μηχανισμό στήριξης πάνω από τα 190 δισ., θα πρέπει να εγκρίνεται «κατά περίπτωση» από την ολομέλεια του γερμανικού Kοινοβουλίου. Επικαλούμενο, ωστόσο, την απόφασή του για τη βοήθεια στην Ελλάδα, το δικαστήριο αναφέρει ότι απαγορεύεται «στη Βουλή να δημιουργεί μόνιμους μηχανισμούς στη βάση διεθνών συνθηκών που οδηγούν στην ανάληψη χρεών επί της βάσης της έκφρασης βούλησης άλλων κρατών με συνέπειες που είναι δύσκολο να καθορισθούν για την Ομοσπονδιακή Δημοκρατία της Γερμανίας».

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European Leaders Have New Weapons to Save Euro

Spiegel
September 13, 2012

The Constitutional Court's ruling on the ESM has provided relief to markets and European leaders. With the bailout fund and the ECB's bond-buying program, the euro zone now has an impressive arsenal of weapons at its disposal. Politicians will soon be turning their attention to the next major project: a European banking union.

On Wednesday, Europe breathed a massive sigh of relief: Germany is not going to stop the efforts to save the euro.

The Federal Constitutional Court's green light for the European Stability Mechanism (ESM), the permanent euro bailout fund, has been welcomed across the continent. European leaders spoke of a "good day for Europe." European Parliament President Martin Schulz remarked with satisfaction that the ruling will help to stop speculation against countries in crisis on the financial markets.

Those markets reacted with relief to the ruling. Share prices and the value of the euro rose, while yields on Spanish and Italian bonds fell. The euro zone will now be "more stable, less risky," said David Thebault, a trader at the Paris-based financial services company Global Equities, in remarks to Reuters.

From the perspective of European leaders, the ruling from the Karlsruhe-based court was the second piece of good news in a week. Last Thursday, Mario Draghi, president of the European Central Bank, announced that the ECB would make unlimited purchases of sovereign bonds of crisis-hit countries on the secondary market to reduce yields. Now, the ESM adds another powerful weapon to the arsenal. The fund can make loans of up to €500 billion ($645 billion) to euro-zone states in crisis.

Taken together, both instruments form the new backbone for the monetary union. They are expected to usher in a long period of calm in the euro crisis. They make betting on a national default or exit from the euro zone suddenly less attractive.

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Fiscal consolidation and reforms: Substitutes, not complements

by Coen Teulings

Vox
September 13, 2012

Many OECD countries suffer from high sovereign debts. Sooner or later, this problem must be addressed. Many argue that this will require some form of fiscal retrenchment or institutional reform or a combination of the two. This column argues that the two are not complements as many suggest – they are instead substitutes.

Many OECD countries suffer from high sovereign debts. Sooner or later, this problem must be addressed. That will require some form of fiscal retrenchment.

Quite often the fiscal problems are due to market rigidities, barriers to entry, and distortive tax systems. A programme of reform must therefore include both fiscal consolidation and institutional reform to enhance future growth. Growth and the larger tax base that goes with it provides the best prospect for solving the fiscal problems.

The obvious question regards timing. What should have priority: fiscal consolidation or institutional reform? A hard-line reasoning would argue that both should go hand in hand.

• Immediate fiscal consolidation to convince financial markets that policymakers stand to get the budget under control, and
• Institutional reform to increase the future tax base.

In this view, fiscal consolidation and institutional reform are complements. I believe the contrary.

The more consolidation is put in place, the smaller the scope for institutional reform. Policymakers therefore face a trade off. The argument does not rely on political fatigue, but on the distribution of wealth between generations:

• Both consolidation and reform reduce the current generation’s wealth and hence their consumption.

There is a limit to the fall in current consumption that is helpful for the resolution of a country’s fiscal problems.

• Too sharp a fall in consumption will lead to costly adjustment of production capacity, from consumption goods and non-tradables (which can only be sold on the home market) to investment goods and tradables (which can be sold abroad).

Fiscal consolidation and institutional reform are therefore substitutes, not complements. The more a policymaker focuses on the one, the less scope there is for the other. Whether consolidation takes the form of lower expenditures or higher tax rates does not matter at this stage.

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Συμφιλιώνοντας τον κ. Στουρνάρα με τον κ. Βαρουφάκη: μια πρόταση οικονομικής πολιτικής

του Γιάννη Ματθαιουδάκη

Το Βήμα
13 Σεπτεμβρίου 2012

H αβεβαιότητα και η κρίση εμπιστοσύνης συγκρατούν τους ξένους επενδυτές και την εγχώρια ιδιωτική πρωτοβουλία. Οι τράπεζες πληγωμένες από την ύφεση και το PSI αποφεύγουν την ανάληψη κινδύνου. Συρρίκνωση 7% του ΑΕΠ για πέμπτη χρονιά. Ανεργία στο 24,5%. Τα έργα έχουν κολλήσει. Από την Ευρώπη τίποτα σε αναπτυξιακό επίπεδο μόνο μεταρρυθμίσεις, εσωτερική υποτίμηση και ισοσκέλιση προϋπολογισμών (αντίθετα η ΕΤΕπ με τον Άκτωρ κάνουν έργα υποδομής στην Αλβανία).

Η ανακύκλωση των πλεονασμάτων του Βορρά στο Νότο και η νομισματικοποίηση των χρεών των χωρών δεν είναι υλοποιήσιμα στο άμεσο μέλλον ενώ οι τρέχουσες εξελίξεις δεν μας αφορούν προς το παρόν. Στο μεταξύ εμείς βρισκόμαστε υπό τον κίνδυνο ολικής κατάρρευσης.

Με την παραπάνω ανάγνωση λίγοι θα διαφωνήσουν. Ωστόσο οι προτεινόμενες λύσεις είναι δυο και μπορούν να συνοψιστούν στο διαλεκτικό σχήμα Στουρνάρας – Βαρουφάκης από τους δύο επιφανείς Καθηγητές Οικονομικής Θεωρίας που συμμετέχουν στα δημόσια πράγματα. Αδρομερώς, υπάρχει η μια άποψη που θέλει να προχωρήσουμε τα μέτρα και να περιμένουμε να αλλάξει κάτι σε ευρωπαϊκό επίπεδο(άποψη κ.Στουρνάρα) και η ακριβώς αντίθετη που θέλει εδώ και τώρα συνολική αναθεώρηση της ευρωπαϊκής πολιτικής απέναντι στην κρίση (άποψη κ. Βαρουφάκη).

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Eurozone relief rally may run its course

by James Mackintosh

Financial Times
September 12, 2012

Relief rallies rarely last. This is a shame, as we have just seen one of the biggest relief rallies on record, at least in eurozone bank shares. After the German constitutional court waved through the eurozone’s new rescue fund on Wednesday, the boost brought the rise in the region’s banks to 50 per cent in 35 trading days.

This is the second-biggest rise over so short a period since the currency began, and brings the banks back to where they were in March, before the latest round of the crisis.

The banks led the way for Europe’s risky assets, which all soared after Mario Draghi’s late-July promise that his European Central Bank would save the euro. Italian and Spanish shares are up a third, the euro briefly passed $1.29 on Wednesday and wider equity markets are up 16 per cent.

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German Decision on Euro Fund Is Good, But Not Enough

Bloomberg
Editorial
September 12, 2012

The euro dodged another bullet with today’s decision by Germany’s constitutional court not to block the creation of a European Stability Mechanism, the latest just- in-time measure by the continent’s leaders to save the currency. That’s good news, but not enough.

Far from being reassured, Chancellor Angela Merkel should take the decision as the starting point for a campaign to explain to Germans why saving the euro is in their best interest. If that doesn’t work, she should call a referendum on Europe.

Had the judges in Karlsruhe refused to allow the fund’s ratification, Europe’s already sick economy could have imploded, dragging down the rest of the world with it. So the ruling came as a huge relief, cheering the equity markets and boosting the euro.

But the case also shows that Germans remain reluctant as a nation to do “whatever it takes,” in the words of European Central Bank President Mario Draghi, to rescue the common currency. That reluctance on the part of the euro area’s main creditor will probably continue to prevent a lasting solution to the debt crisis.

That needs to change, and the spectacle of global markets, governments and central banks awaiting the words of eight Germans dressed in red robes and white bibs helps explain why.

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Germany Rejects Blank Check for Euro’s Fiscal Laggards

by David Henry

Bloomberg
September 12, 2012

So there we have it. Germany's constitutional court has ruled that the president can ratify the treaty on euro-area bailouts. With all the enthusiasm of a bride on her way to an arranged marriage, the country's voters can now be dragged kicking and screaming to help finance the European Stability Mechanism.

But the champagne corks may not be popping in peripheral capitals over the court's decision because the conditions imposed only add to those already in place. Euro members that tap the ESM will have to meet tough budget criteria similar to those demanded by the International Monetary Fund of its aid recipients. The question now is whether indebted countries are willing to meet those conditions.

European Central Bank President Mario Draghi took the courageous and laudable step last week of offering to buy an unlimited number of bonds in the secondary market as a way to bring down the borrowing costs of troubled euro members. Again, that type of aid would come with strict conditions. Clearly, the ECB and the German constitutional court have now drawn a line in the sand over measures to help Europe's fiscally challenged nations, five of which have already asked for bailouts.

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A Setback for Germany's Euroskeptics

by Roland Nelles and Severin Weiland

Spiegel
September 12, 2012

Germany's Federal Constitutional Court has rejected a lawsuit brought by opponents of the euro, and has set only a few conditions for the ratification of the European Stability Mechanism and the fiscal pact. The main proviso is that the ESM cannot increase the scope of Germany's liability without the country's agreement. What will the ruling mean for Berlin and Europe?

The material he had to work with was indeed highly complex, but for a moment, the president of Germany's Federal Constitutional Court even managed to generate a bit of laughter when he announced the decision in Karlsruhe on Wednesday morning. The clamor came at the moment when Andreas Vosskuhle misspoke and stated that the petitions by the plaintiffs had been largely "founded." But it had been a Freudian slip and he quickly corrected himself after a colleague pointed this out, saying "unfounded."

On Wednesday, the petitioners in the case challenging the ratification of the permanent euro bailout fund, the European Stability Mechanism (ESM), and the fiscal pact failed. They included Peter Gauweiler, a conservative member of parliament with the Christian Social Union, the Bavarian sister party to Chancellor Angela Merkel's Christian Democratic Union party, as well as the Left Party.

With its decision, Germany's highest court has remained true to its previous decisions regarding the common currency. So far, the court has not yet not rejected a single measure taken by the government in its efforts to save the euro. As in previous rulings on the euro bailout, the court stipulated the conditions under which the ESM treaty, which will be international law, can be ratified.

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Key Facts About the ESM

by Matina Stevis

Wall Street Journal
September 12, 2012

Following this morning’s largely positive decision by the German Constitutional Court to allow the treaty establishing the European Stability Mechanism to move to the country’s parliament for ratification, we take a look at what the ESM is, what it will do and what it won’t, and how it fits into the overall euro-zone crisis response.

WHAT IS THE ESM?

The European Stability Mechanism (the full treaty establishing it is here) is the permanent bailout fund that the euro-zone countries are putting together to finance rescue packages for ailing member states. It is the “permanent” institution that will take over from the temporary fund, the European Financial Stability Facility.

The ESM’s managing director will be Klaus Regling. He is German, and is also the boss at the EFSF. Its headquarters will be in Luxembourg.

HOW MUCH MONEY CAN IT LEND?

The 17 euro-zone countries will pay €80 billion in cash into the ESM. That cash–to be paid in installments—will act as a capital cushion, allowing the fund to lend on to members in need several times the amount. Specifically, the ESM will be able to lend €500 billion in total. That’s on top of what the EFSF lends to Greece, Portugal, and Ireland. (*For correction see below.)

The capital installments are planned like this:

In the second half of 2012, €32 billion of capital will allow it to lend €210 billion

In July 2013, another €32 billion will allow it to lend €420 billion

And the remaining €16 billion, due to be paid in in early 2014, will raise the lending capacity to €500 billion.

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Where the eurozone crisis may go from here

by Lorenzo Bini Smaghi

Financial Times
September 12, 2012

With its decision of September 6 the European Central Bank has taken a large part of the “convertibility risk”, i.e. the risk of a break-up of the eurozone, off the table. Spreads have come down substantially in the following days, especially in Spain and Italy. Today’s decision by the German constitutional court to allow ratification of the bailout programmes should see those spreads come down further still.

The question now is whether countries will decide to activate the ECB’s intervention.

Requesting such programs entails costs and benefits.

The cost is mainly political, due to the stigma attached to any type of IMF or EU support. By asking for support, a government implicitly admits that its previous policies have not succeeded in convincing the markets. The negotiation of an adjustment program and the regular monitoring by the so-called troika (IMF-EU-ECB) is considered to entail a loss of sovereignty. Any government accepting intervention also fears losing political support. And the tougher the conditions attached to a programme, the higher the political cost associated with it.

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Good week for the euro - but also a warning

by Stephanie Flanders

BBC News
September 12, 2012

The German chancellor says it's a "good day for Germany and a good day for Europe". Better than that, it's been a good week.

First, the European Central Bank delivered on its pledge to do more - possibly quite a lot more - to hold the euro together. Now the German constitutional court has ruled in favour the new European bailout fund, the ESM.

Cue sighs of relief in financial markets around the world. But there's an irony in both decisions which should not be lost on the financial markets or Europe's politicians: the institutions that seem to be most keen to put control over the future of the euro into the hands of the voters are the ones that are least accountable to them.

This is quite clear in the case of the German constitutional court's judgement. As expected, there were conditions attached to the court's decision to allow the ESM to go ahead: Germany's potential liability must remain at the current level of 190bn euros (£152bn; $245bn).

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Eurozone building blocks are falling into place

by Gavyn Davies

Financial Times
September 10, 2012

Today’s decision from the German Constitutional Court in Karlsruhe is a major victory for Angela Merkel and for Germany’s preferred approach to handling the eurozone crisis. The court has approved the ratification of the ESM treaty, with only minor conditions attached.

It looks like a comprehensive defeat for those trying to mobilise political opinion inside Germany to block the treaty. As a result, the ESM and the fiscal compact can now be safely launched, and any immediate obstacle to Mario Draghi’s bond buying plan at the ECB has disappeared. What has emerged from this messy process is, in effect, an ESM leveraged by the ECB, something which seemed impossible this spring.

This represents a very large building block in the rescue strategy which the eurozone has gradually pieced together in the last three months.

The acute phase of the crisis peaked in mid June with the Greek election, which reduced the probability of a disorderly Greek exit.

Then, the eurozone summit in late June announced a roadmap for the long term reform of the eurozone. Mr Draghi was a co-author of the plan, and in retrospect it was a very important step, not least because he deemed it to be so.

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Court Allows Germany to Ratify Bailout Fund

Wall Street Journal
September 12, 2012

Germany's highest court Wednesday threw out attempts to delay the country's ratification of the European Stability Mechanism and the so-called "Fiscal Pact" but placed strict conditions on expanding it beyond its foreseen limits.

The ruling, which was broadly as expected, removes a major question mark over two crucial elements of the euro zone's plan to manage its debt crisis. It paves the way for the creation of a permanent bailout mechanism in the region that will be able to provide large-scale financial assistance to heavily indebted euro-zone economies.

The news was welcomed by European and German politicians. The head of the euro zone's college of finance ministers, Jean-Claude Juncker, who is also Prime Minister of Luxembourg, said that following the court's decision he will convene the first meeting of the ESM's board of governors on Oct. 8 in Luxembourg.

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Read the Press Release of the court

See also

Germany’s Currency Nostalgia Is Badly Off the Mark

by Clive Crook

Bloomberg
September 12, 2012

Let’s hope Germany thinks hard about George Soros’s proposal that it should lead the euro system or leave it. The more carefully Germans study this choice, the more eager they will be to make the present system work.

Many German voters are understandably sick of their euro adventure. The next phase of crisis management, following the European Central Bank’s promise last week to buy the bonds of struggling economies, will demand new fiscal outlays from German taxpayers and expose them to greater risk of losses later. Their growing resentment of Greece, Ireland and Portugal -- and soon Spain and Italy, whose appetite for assistance is vastly bigger -- calls into doubt Europe’s efforts to stem the crisis and threatens the euro’s viability.

Germans might reconsider their nostalgia for the deutsche mark, though, if somebody -- their own government, for instance -- had bothered to spell out the alternatives to the bailouts. Maybe Soros’s intervention will help that to happen.

Up to now, the obvious alternative to keeping Greece and the others afloat within the euro system has been for them to leave or be ejected. This used to be unthinkable but isn’t any longer. The doomsday option has become a bargaining chip that weak and strong countries alike are trying to use.

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ECB Unlimited Support of Bonds

by Patrick Chappatte

New York Times
September 11, 2012

Draghi alone cannot save the euro

by Martin Wolf

Financial Times
September 11, 2012

Last week’s decision by the European Central Bank to make unlimited purchases of government bonds in secondary markets was both necessary and bold. Mario Draghi, the ECB’s president, deserves credit for having obtained agreement for this controversial step, against the sole, albeit significant, opposition of Jens Weidmann, president of Germany’s redoubtable Bundesbank. It is a pity that the ECB did not do this before the crisis in sovereign debt reached Spain and Italy. Yet this delay is not surprising: eurozone policy makers have, perhaps inevitably, done too little, too late.

It is not the ECB’s fault that this action is too little. Its aim is to eliminate the risk of a eurozone breakup forced by the markets. But it cannot achieve this on its own. Ensuring the survival of the eurozone is a political decision. The ECB can only influence, not determine, the outcome.

The rationale offered for the programme of “Outright Monetary Transactions” is ingenious. The ECB insists that it does not aim to finance governments in difficulty. That, it insists, is a mere byproduct. At last week’s press conference, Mr Draghi stated that: “We aim to preserve the singleness of our monetary policy and to ensure the proper transmission of our policy stance to the real economy throughout the area. OMTs will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro.” In making this case, Mr Draghi argued that “you have large parts of the euro area in what we call a ‘bad equilibrium’ ... So, there is a case for intervening ... to “break” these expectations, which ... do not concern only the specific countries, but the euro area as a whole. And this would justify the intervention of the central bank”. This then marks belated acceptance of strong arguments made by the Belgian economist, Paul de Grauwe, at the London School of Economics.

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Brussels Pushes Forward with EU Banking Union

Spiegel
September 11, 2012

On Wednesday, European Commission President José Manuel Barroso is expected to unveil his plans for a unified banking supervisory system led by the European Central Bank. It is intended to break a vicious cycle of crisis-shaken banks and bailouts. But the plan is facing some resistance from Germany.

José Manuel Barroso wants to present himself as a true president of Europe. Following the example of American presidents, this Wednesday morning he will address the 754 representatives of the European Parliament in Strasbourg, giving a speech on the state of the European Union. He will evoke the dangers of the financial crisis -- and then present a way out.

The representatives in Brussels have been working all summer on this solution: By the end of the year, they plan to have a common banking union in place for the 17 euro-zone countries, a unified supervisory system led by the European Central Bank (ECB) in Frankfurt. The banking union is intended to break a vicious cycle of crisis-shaken banks and governments forced to shell out massive amounts of aid.

"Barroso wants to make it into Europe's history books," says one of his commissioners in Brussels. The president of the European Commission, the EU executive, has taken personal responsibility for creating this new system, taking it out of the hands of Internal Market Commissioner Michel Barnier, to whose portfolio a responsibility like that would usually belong. Barroso wants to turn over supervision of all 6,000 banks in the euro zone to the ECB; he will also present plans for joint bank supervision and for deposit insurance. Both these plans have the same ultimate effect: German savers and taxpayers will be made liable for problems experienced by all euro-zone banks.

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In a Greek junkyard, signs red tape defeating cuts

Reuters
September 11, 2012

In a sprawling yard in Athens, a yellow Porsche rusts among dusty motorcycles, police cars with bullet holes and wrecked city buses - a telling image of one Greek government agency's slide into bureaucratic quagmire.

Known by its Greek acronym ODDY, the Organisation for Public Property Management ran warehouses nationwide that auctioned off anything from old sofas discarded from city hall waiting rooms to luxury cars confiscated from drug dealers.

Now, efforts to consign ODDY itself to the scrapheap, along with its loss-making payroll costs, show just how hard it is for the Greek government to satisfy foreign creditors' demands that it shut down dozens of state agencies to save money; it may say it is waging war on red tape, but the red tape may be winning.

Set up to offload army surplus after World War Two, ODDY began showing losses a decade ago, squeezed by competition while maintaining dozens of employees on staff. So when some 50 state entities were slated for closure in 2011, ODDY was on the list.

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European Luminaries: Reflect on Euro 'Seventeen Countries Were Far Too Many'

Spiegel
September 11, 2012

Former German Chancellor Helmut Schmidt and former French President Valéry Giscard d'Estaing are two of the leading architects of the European Union. In a SPIEGEL interview, the veteran statesmen discuss the causes of the euro crisis and the lack of vision among today's European politicians.

Seldom have a German chancellor and a French president seen eye to eye on so many economic and fiscal policy issues as Helmut Schmidt, 93, and Valéry Giscard d'Estaing, 86. During their terms in office, which began in 1974, both had to deal with the oil crisis, stagnating economic growth, rising inflation and unemployment. After the demise of the Bretton Woods international monetary system, in which the dollar served as the world's key currency, they strongly advocated the introduction of the European Monetary System (EMS), with stable yet adaptable exchange rates and the European Currency Unit (ECU), as the standard unit of account.

In 1975, their efforts also led to the founding of the Group of Six (G6), which consisted of the world's leading industrialized countries -- France, Germany, Italy, Japan, the UK and the US -- which met once a year for a global economic summit. After they were voted out of office (Giscard in May 1981, Schmidt in Oct. 1982), they both remained true to their European ideals. In 2001, Giscard was elected chairman of the European Convention, which was tasked with drafting a constitution for Europe. To this day, the two statesmen have maintained a close friendship.

SPIEGEL: Over 30 years ago, you both initiated the establishment of the European Monetary System, which was a decisive preliminary step toward European monetary union. Now, as elder statesmen, do you have reason to fear that you will live to see the collapse of the euro?

Schmidt: The euro will, of course, still exist a few years from now. I am certain that it will outlive me. It could be that it outlives us all, and that is what I assume will happen.

Giscard: The euro will certainly be around longer than us. Your question is interesting because it is highly unusual. Why don't you ask for instance whether the US dollar will still exist in a few years' time, or the Japanese yen or the Chinese yuan?

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