When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Germany

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.

You've reached your limit of free articles.

To read the full story, start your free trial today.

Get unlimited access. Cancel anytime.

Exclusive coverage from the world's top sources, in English for the first time.

Insights from the widest range of perspectives, languages and countries.

FOCUS: Russia-Ukraine War

That Man In Mariupol: Is Putin Using A Body Double To Avoid Public Appearances?

Putin really is meeting with Xi in Moscow — we know that. But there are credible experts saying that the person who showed up in Mariupol the day before was someone else — the latest report that the Russian president uses a doppelganger for meetings and appearances.

screen grab of Putin in a dark down jacket

During the visit to Mariupol, the Presidential office only released screen grabs of a video

Russian President Press Office/TASS via ZUMA
Anna Akage

Have no doubt, the Vladimir Putin we’re seeing alongside Xi Jinping this week is the real Vladimir Putin. But it’s a question that is being asked after a range of credible experts have accused the Russian president of sending a body double for a high-profile visit this past weekend in the occupied Ukrainian city of Mariupol.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

Sign up to our free daily newsletter.

Reports and conspiracy theories have circulated in the past about the Russian leader using a stand-in because of health or security issues. But the reaction to the Kremlin leader's trip to Mariupol is the first time that multiple credible sources — including those who’ve spent time with him in the past — have cast doubt on the identity of the man who showed up in the southeastern Ukrainian city that Russia took over last spring after a months-long siege.

Russian opposition politician Gennady Gudkov is among those who confidently claim that a Putin look-alike, or rather one of his look-alikes, was in the Ukrainian city.

"Now that there is a war going on, I don't rule out the possibility that someone strongly resembling or disguised as Putin is playing his role," Gudkov said.

Keep reading...Show less

You've reached your limit of free articles.

To read the full story, start your free trial today.

Get unlimited access. Cancel anytime.

Exclusive coverage from the world's top sources, in English for the first time.

Insights from the widest range of perspectives, languages and countries.

The latest