“Disaster for all of us”
Bundesbank President warns AfD against leaving the euro
March 23, 2024, 9:26 a.m
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The AfD considers the EU to be a failed project and also rejects the euro. Bundesbank President Nagel can only warn against such plans: the EU and the monetary union are the cornerstones of prosperity, he says in an interview. His recipe for German recovery? Fewer complaints.
Bundesbank President Joachim Nagel sees the emerging right-wing extremism as a threat to prosperity in Germany. “I appeal to everyone not to take the danger of right-wing extremism lightly,” he told the newspapers of the Funke media group. Right-wing extremists deterred investors and skilled workers from abroad. “This threatens our prosperity.”
If people talk about Germany leaving the monetary union or the EU, he can only warn, Nagel replied to a question about the AfD. “An exit would be an economic catastrophe for all of us.” The EU and the monetary union are the cornerstones of prosperity.
The AfD in particular regularly appears open to a German exit from the EU and the euro. In her election program for the upcoming European elections, she describes the EU as a failed project. She also rejects the euro. In an interview with the British newspaper Financial Times, AfD leader Alice Weidel called Britain’s exit from the EU in January “absolutely right” and a “model for Germany.”
British economists have a different opinion: They have calculated that Britain will have to convert every year as a result of Brexit Lose 163 billion euros. The Cologne Institute for the German Economy (IW) assumes that Germany could lose 2.2 million jobs if it leaves the European Union.
Please don’t complain
At the same time, Nagel warned the business associations not to badmouth the economic situation in Germany. “In the approximately 20 years that I have worked at the Bundesbank, practically every business association has complained about every federal government,” he said. “I don’t want to downplay the enormous challenges. But we shouldn’t make the situation worse than it actually is. Otherwise no one will come to Germany and invest. We are not the sick man of Europe.”
Nagel admitted that he too would not be satisfied if the economy just stalled this year. However, Germany comes from a special situation because its large, open economy was particularly badly affected by the Russian war of aggression against Ukraine. “We shouldn’t forget that the labor market has remained stable,” reminded Nagel. “Germany has almost full employment.”
However, the Bundesbank President called for more ambition in tax cuts and reducing bureaucracy. “The Growth Opportunities Act in particular contains lower tax relief than originally planned,” he said. “There is still room for improvement when it comes to reducing bureaucracy and speeding up procedures.”
What is now important, however, is to actually implement the Growth Opportunities Act. “Overall, I would like to see more willingness to compromise. We need a common, strong answer for the business location,” demanded Nagel. “This is the only way Germany can get away from the bottom places in terms of growth rates.”