Statement EES President Dr Ingo Friedrich, March 2, 2023

What does the "normal" consumer expect from the further development of the EURO?

At the invitation of EWS President Dr. Ingo Friedrich, the "constructor" of the EURO and long-time director of the European Security Mechanism (ESM) Klaus Regling spoke to the Economic Advisory Board about the expected developments of the EURO.

For consumers, he saw the following scenario:

  1. The loans issued by the ESM at the time to “rescue the EURO” were and are being serviced and repaid punctually “down to the last penny” by the then problem states (especially Italy and Greece). So far, no costs have arisen for the German taxpayer.
  1. At that time, the countries concerned were only granted loans on condition that they carried out rigorous budgetary reforms. These reforms have meanwhile led to these states being in a much more stable position today.
  1. The EURO has established itself over the last twenty years as a stable and second most important currency in the world after the Dollar and there is every indication that this will remain the case.
  1. The state interest costs of today's (higher) new debt of the EU states are currently still lower than before the EURO crisis because the EURO interest rates have remained at a significantly lower level so far.
  1. If, in view of today's enormous challenges, the EU states still had their many, globally speaking, relatively small currencies, chaos and great uncertainty with unforeseeable speculative dangers would result. "Thank God we have the EURO". However, the stability of the EURO must be constantly “worked on” through tight state budget management, a clever interest rate policy by the central bank and constant innovations in the economy as well as common sense on the part of the collective bargaining partners.
  1. The drastically high inflation rate of 8 percent caused by the Ukraine war has probably passed its peak by now. However, in order to come close to the target rate of two percent, it will take some time and considerable effort from everyone involved.