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Founder of euro calls for end to single currency, “to let South recover”

Oskar Lafontaine, one of the so-called founders of the Euro, has called for an end to the single currency “to let Southern countries recover”.

In a communiqué put out on the site of the Left Party of the German parliament Lafontaine stressed that “the Germans still do not understand that the south of Europe, including France, will be forced through its current misery to fight, sooner or later, against German hegemony”.

According to Público, the former minister of finance accused his country of what he called social dumping, and of reducing salaries to protect its exports.

Portugal’s leading daily explains that “in Germany, the policy of a minimum salary doesn’t exist”. Low-paid workers are simply exempt from both taxes and receiving pensions, and thus “many businesses” get away with paying staff as little as three or four euros an hour.

This effectively means they can sell goods at less than it costs to make them – a practice that is prohibited under EU law – and which has contributed to difficulties facing poorer countries which struggle to produce, while assuring their workforce a national minimum wage.

Lafontaine suggests that the spirit of the euro is “mined”.

“Merkel will wake up from her hypocritical sleep” when rage against Germany’s salary policies inevitably penalise exports”.

The way ahead, he stresses, is to return to the system in place before the single monetary union: the “European monetary system” that allowed “controlled devaluations and valuations” in national currencies.

Weaker economies would need to be “helped by the European Central Bank” and what Lafontaine dubs the casino “will have to close”.

Transition would have to start slowly, he added, beginning with Greece and Cyprus.

Ending his statement, the man who played such a pivotal part in the introduction of the single currency said “the policies of austerity are leading to disaster”.

His words came as elsewhere others are echoing the same message.

Last weekend it was French finance minister Pierre Moscovici, who said: “Austerity is over. We are at the end of the dogma of austerity”.

France will not be implementing any new cuts, Público explained, although it will be continuing with reductions in public expenditure.

natasha.donn@algarveresident.com