The new German anti-euro party Alternative für Deutschland’s radically different take on the eurozone compared with the rest of the German political establishment has generated a lot of interest both inside Germany and beyond. As such it was no surprise that today’s Q&A session with AfD leader Bernd Lucke (hosted by the Bruges Group in Westminster) was packed. Here are a few key points from the event:
On the formation of AfD and its prospects
Lucke admitted that as a young Economics professor in 1999 he supported the euro because he believed it would lead to structural reforms in Southern European countries, and because he took the ‘no bailout clause’ in the Maastricht Treaty at face value. It was the breaking of this that led him to leave the CDU and eventually establish AfD.
He also said that the German political system is structured to keep out new parties – including state subsidies for established parties - with the Greens being the only successful entrant onto the scene in recent years. However he said he was encouraged by polls suggesting AfD’s potential support could be as high as 30%, and that the key would be attracting lower educated blue collar workers in particular.
On the Eurozone
Lucke said that he had reached the conclusion that the current eurozone policy was fatally “mis-conceived” and would never work because financial markets’ fears of a sovereign default could never be squared with the kind of tough conditionality necessary to ensure that member states met their obligations with regards to structural reforms and fiscal consolidation (the failure of the fiscal pact to enforce its 3% deficit limit suggests he could have a point).
Instead, he argued that the Southern member states should leave immediately in order to allow for the devaluation of their new currencies, after which the remaining member states could decide whether to maintain a currency union between themselves or to go for a full break up.
On the UK and the EU
Lucke said that despite his opposition to the euro, he was not opposed to EU integration, adding that as a German he valued its role as a peace project. He even suggested that he was not opposed to transfers between European states per se but that the current system was flawed – for example indirect transfers via the ECB’s bond buying programmes, which happen without democratic approval. However, he added that there was much to be reformed about the EU from its overbearing bureaucracy and appetite for regulation which stifle economic growth to its undemocratic practices. He added that as such he broadly supported David Cameron’s critique, and that he valued British ‘euroscepticism’ as a positive force in ensuring better decisions being reached at the EU level.