Economy

Bring Back Deutsche Marks! (Euros Can Stay) - A German Case For Parallel Currencies

A ten D-Mark bill
A ten D-Mark bill
Günther Lachmann

In the face of the European debt and financial crisis, Hamburg-based economist Dirk Meyer has a "third way": a system of parallel currencies.

A professor at the Helmut Schmidt University of the armed forces, Meyer is convinced that in its present form the euro zone is simply not sustainable in the long term. He used an address to the Berlin Freie Wähler (free voter) association earlier this week to describe a standing European dilemma: on the one hand, the euro is presently causing huge economic problems; on the other it is politically and economically indispensable.

"If we go on the way we have been, it’s going to cost us somewhere between 75 and 150 billion euros a year," Meyer said. However, giving up the euro and returning to national currencies would mean "each state to itself, and the disintegration of the European Single Market" – and the cost of that, Meyer added, was "incalculable," although he estimated it at between 300 and 400 billion euros.

Hence, according to Meyer, the euro has to be here to stay, but it should be complemented by national currencies. He characterized today’s Europe as a two-speed Europe, the requirements of which cannot be met by the euro as a single currency. He said the principle of the Single Market could only work if there were competing currencies.

From a legal point of view, there were ways that individual member states could accommodate this, Meyer said, pointing to exceptions in fishery and farming policies.

In Greece, the drachma would be reintroduced as the official currency while the euro would stay on as an equivalent currency. The National Bank of Greece would split into two departments, with the Euro Department linked to the financial and political institutions of the Euro Zone, and the Drachma Department responsible for an independent monetary policy with flexible exchange rates.

Greek exception

However, possible bankruptcy of the Greek state also has to be factored in, Meyer said, and were that to happen Greece should be excluded from the euro zone and go back to using the drachma as a sovereign currency while the euro would remain as a legal currency.

"If we do it that way we can reduce the temptation to take the money and run, both in terms of capital flight, but also the risk of a run on banks," Meyer said. The devalued drachma would make Greece more competitive and lead to new growth in the mid-term.

Under certain circumstances, a return to the D-mark could also be beneficial to Germany if the euro continued on as a parallel currency, Meyer said. The mark could act as a form of security if the euro area were hit by inflation, but there would also downsides, he said: for example, anybody with a life insurance policy in euros would be paid out in euros, and would get badly hit in the event of euro-area inflation.

Meyer added that he operated under the assumption that were the D-mark to be reintroduced in Germany the euro would inevitably play second fiddle to it.

Free Voter federal chairman Hubert Aiwanger said: "We’re looking for alternatives to current policies that lack alternatives with regard to Europe. We need new concepts instead of seeing Germany as the one that has to cough up ever-more for ever-longer periods."

Aiwanger does not believe Greece can pay its debts back, and that the reintroduction of the drachma parallel to the euro could be a reasonable solution. Other countries could later adopt the system as well. "There’s a disconnect in the currency zone we presently have," he concluded.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Society

Iran To Offer Master's And PhD In Morality Enforcement

For those aiming to serve the Islamic Republic of Iran as experts to train the public morality agents, there are now courses to obtain the "proper" training.

Properly dressed in the holy city of Qom.

Iran will create new "master's and doctorate" programs to train state morality agents checking on people's public conduct and attire, according to several Persian-language news sources.

Mehran Samadi, a senior official of the Headquarters to Enjoin Virtues and Proscribe Vices (Amr-e be ma'ruf va nahy az monkar) said "anyone who wants to enjoin virtues must have the knowledge," the London-based broadcaster Iran International reported, citing reports from Iran.


The morality patrols, in force since the 1979 revolution, tend to focus mostly on young people and women, particularly the public appearance for the latter. Loose headscarves will send women straight to a police station, often in humiliating conditions. Five years ago, the regime announced a new force of some 7,000 additional agents checking on women's hijabs and other standards of dress and behavior.

A woman in Tehran walks past a mural of an Iranian flag

The traffic police chief recently said women were not allowed to ride motorbikes

Rouzbeh Fouladi/ZUMA

New academic discipline

Last week, for example, Tehran police revealed that they had "disciplined" agents who had been filmed forcefully shoving a girl into a van. Such incidents may increase under the new, conservative president, Ibrahim Raisi.

Speaking about the new academic discipline, Samadi said morals go "much further than headscarves and modesty," and those earning graduate degrees would teach agents "what the priorities are."

Iran's Islamic regime, under the guidance of Shia jurists, continuously fine tunes notions of "proper" conduct — and calibrates its own, interventionist authority. More recently the traffic police chief said women were not allowed to ride motorbikes, and "would be stopped," Prague-based Radio Farda reported.

Days before, a cleric in the holy city of Qom in central Iran insisted that people must be vaccinated by a medic of the same sex "as often as possible," and if not, there should be no pictures of mixed-sex vaccinations.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ