Germany’s business sector is less reticent and, frankly, more courageous than its British counterpart: it is launching a full-scale defence of the euro and demanding further measures to deepen the EU’s political integration. For all the worries within her coalition about German “concessions” or “softening of positions” at the recent EU summit Angela Merkel can count on the support of leading companies.
Over the past two days two senior chief executives – Michael Diekmann at insurer Allianz and Peter Löscher at manufacturing giant Siemens – have given interviews calling for “more Europe” in the manner of the Chancellor herself. Diekmann told Welt am Sonntag: “Returning to the deutschmark would be irresponsible. So we should stop all this kind of speculation“. And: “The issue is not how much Germany is paying for what. In the debate over Europe you have to take the long view…the strong position Germany has today will not be sustainable“. You can read the whole interview here (in English); Allianz.com.
What’s interesting is that, as risk managers, Diekmann and his senior team have calculated the impact of a German exit from the euro and a return to the mark: “a deep depression with GDP dropping in double digit figures for a while, ultimately losing 25% of its GDP within four to five years.” This Allianz prognosis and one from UBS underline the real stakes at the heart of the euro crisis.
Similarly, the Chancellor’s economic experts’ group warns today: “For Germany an uncontrolled collapse of the euro area would be tied up with high risks” and “huge losses” would be incurred by the financial sector, big business – and private individuals. A return to the mark would bring a huge revaluation, which would permanently and massively damage German competitiveness, the five official advisers say.
In today’s FAZ (auf deutsch) Löscher says: “Europe needs the euro and Germany needs it to a special degree. Without the euro our country would lose a huge amount of competitiveness.” And, says the Austrian, that means structural reforms and financial consolidation within a tighter fiscal and monetary union.
But, like Diekmann, he goes further: he wants structural reforms within the institutions and decision-making bodies of the EU itself – “e.g., towards a stronger democratic legitimacy and the battle against youth unemployment.” That chimes with the Allianz boss: “For decades the EU was mainly a construction of the elites. That’s over now. It won’t get us any further.” Löscher begins to sound almost visionary: “The current impression that this is all about the euro is far too short-sighted. Europe was and remains a political idea and a community of values and the euro is part thereof. The question runs: Europe or no Europe. And, here, we are crystal clear we stand for Europe.“
In case people imagine that the pair is simply defending corporate interests at the expense of taxpayers – a recent criticism within Germany – they insist that much more is at stake. Löscher speaks of only a united Europe having relevance in the world, Diekmann of preserving Germany’s social system and global competitive position. Whether this is sincere or disingenuous is beside the point: here we have two very senior executives, one from the financial sector, the other from manufacturing, prepared to speak out on the most important political issue facing Europe. What say you, John Cridland, and your members?