19 September 2013

Elections in Austria: Right-wing party calls for referendum on ESM

Heinz-Christian Strache, Chairman of Austrian right-wing party FPÖ, has called for a referendum on the eurozone's rescue fund, shortly before the general elections in Austria on 29 September.

Translated from the German

You are against bank aid and want to go back to the Schilling. But without the euro, economically strong countries' currencies would revalue dramatically. How would your countermeasures work in practice?

The D-Mark was revalued 35 times. If you believe the SPÖ and ÖVP, any revaluation means the end of the export sector. The history of Germany and Austria refutes this claim: The revaluations forced the companies to structural reforms and innovations in order to remain competitive. That was the foundation of our economic miracle. As the euro was introduced, all warnings were cast to the winds, and today our worst fears have come true: Now the common currency is a question of faith. In reality, we can no longer afford the euro, it threatens social peace and stability in Europe. Therefore, we must consider whether we should not return control to national currencies.

So back to the Schilling...

We could link our currency to the Deutsche Mark again.

And together, this would mean an revaluation of the D-Mark/Schilling block of at least 30 or 40 per cent - almost overnight...

Yes, because our neighbours would devalue. Thus the differences between the economies would be balanced out again. Switzerland fares very well with its own currency.

The Swiss National Bank has to protect the Swiss export industry by spending billions to prevent the franc from shooting into the sky.

Yes, but this happens with significantly less capital than the liabilities of Austria for the euro's stability mechanism ESM amount to. I would like to swap with the Swiss: They only have costs of around €3 billion, Austria is liable for around €19 billion. We finally need to have an honest debate: Any alternative to the euro would cause less damage than the compulsive adherence to the common currency. The euro has failed: Economists assume that over €3,000 billion of liability could actually be needed. And only Germany, the Netherlands and Austria could pay for it - this does not work. The European project worked excellently until - and only until - the introduction of the euro.

Full interview (in German)

Article in Spiegel Online (in German)