populist politics

The Return of the Anti-Euro Party

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Alice Weidel, a corporate consultant with a doctorate in economics, wants Germany to leave the single currency. Source: Picture Alliance

Alice Weidel says she joined Germany’s nationalist Alternative for Germany because of the euro crisis. The AfD, she says, was the only party to “clearly and openly” target the policy of bailing out crisis-hit euro economies for violating the law and harming German interests.

Today, the issue appears to have taken a back seat to the AfD’s obsession with migration, Islam and refugees. Ms. Weidel, the party’s new co-leader, insists the party’s focus hasn’t shifted – it’s just that its statements on economic policy garner far less media attention.

“It is my job to bring the AfD back into public perception as the party against the euro crisis policy,” Ms. Weidel told Handelsblatt.

Ms. Weidel, who wants Germany to leave the euro, was an ally of party founder Bernd Lucke, a free market economist who was forced out of the party by its right wing.

A corporate consultant with a doctorate in economics, she took over joint leadership of the party with 76-year-old Alexander Gauland last month. Like their predecessor Frauke Petry and other high-ranking party figures, Mr. Gauland is much more likely to comment on migration than economics. Ms. Weidel’s press releases, meanwhile, are overwhelmingly on the euro.

Her criticism of the European Central Bank’s monetary policy is in line with that of many other economists. It gets a lot less media attention than her warnings against Islamisation, or her comment that rescuing migrants from the Mediterranean was a sign of “Europe’s boundless stupidity.”

Yet, Ms. Weidel believes economics is just as important to the German people. Problems with property prices, rents and pension funding are direct consequences of the euro bailout policy, she argues. And she wants to explain this to the public.

“The euro crisis policy is a danger to democracy.”

Alice Weidel

Her second key issue, the battle against Finance Minister Wolfgang Schäuble’s ceiling on cash transactions, doesn’t grab headlines either. The other political parties dismiss the issue as a storm in a teacup, since nobody actually wants to do away with cash.

Ms. Weidel also wants to position the AfD as the tax-cutting party – and here she isn’t far from the center ground of German politics. She wants to raise the maximum-tax-rate bracket. Above all, she argues, the middle class needs tax relief. But she fails to explain how that would be compatible with her proposal, which would see high earners benefit most.

Still, Ms. Weidel is adept at putting her economic arguments into pithy soundbites. “The euro crisis policy is a danger to democracy,” she says, arguing that parliaments are allowing power to shift to the executive, by waving through government plans.

Ms. Weidel doesn’t see Grexit as the solution. If Greece were forced out, she argues, the bankrupt country would continue to rely on a financial drip-feed from Germany. The Bundesbank, meanwhile, is far better positioned to deal with an exit than the crisis countries. It could, for example, limit appreciation pressure on the reintroduced German mark by intervening in the currency market and buying up euros.

Ms. Weidel cites Walter Eucken, father of ordoliberalism, as her greatest economic inspiration. She insists that those in Chancellor Angela’s Merkel’s conservative Christian Democratic Party who refer to Mr. Eucken have misunderstood his views on the role of economic policy to optimize the free market. Her position on fiscal policy is inspired by Austrian economist Friedrich August von Hayek.

Karl Popper’s “The open Society and Its Enemies” is her other great inspiration, she says. This might seem odd, given her party’s emphasis on borders and the nation. Similarly, her years working in China and with the US investment bank Goldman Sachs, suggest a far more international perspective than one might expect from the head of such an inward-looking party. But Ms. Weidel sees no contradiction. “You cannot shape political systems with open borders,” she says.

Norbert Häring holds a PhD in economics and writes about monetary policy, exchange rates, credit markets and the latest scientific developments in economics. To contact the author: haering@handelsblatt.com

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