German adviser gives ailing euro 'limited chance of survival'
The euro has a "limited chance of survival" and may only endure another five years, says Kai Konrad, one of the German government's closest economic advisers.
In notably outspoken remarks for a senior German figure, Dr Konrad, chairman of a scientific council that advises the finance ministry, said: "Europe is important to me. Not the euro. And I would only give the euro a limited chance of survival."
Asked whether he thought the single currency would last five years, the economist said: "A concrete period is hard to identify as it depends on so many factors. But five years sounds realistic."
This pessimistic judgment runs counter to the official German government view that the euro must be held together for the sake of unity in Europe. Dr Konrad's remarks came in an interview with the newspaper Welt am Sonntag on the debt crisis in Europe.
He warned that: "No country can pile up debt without running the risk that their investors will pull the plug. It's in each [country's] interests to keep their own debts as small as possible. Where the limit lies has to be individually decided. That depends among other things on economic growth and the growth of population."
Dr Konrad said countries should have the freedom to get into debt, provided they carried the "sole responsibility" for these debts. He made his blunt remarks about the future of the euro when the interviewer suggested he was advocating a return to the nation state.
German Chancellor Angela Merkel has always insisted she wants to preserve the single currency and maintain the eurozone in its current form. In a speech to the Bundestag two years ago, she told MPs: "Nobody should take for granted another 50 years of peace and prosperity in Europe ... that's why I say: If the euro fails, Europe fails."
The government's official line is the euro is essential for the prosperity of an export-oriented nation. Rather than accept the break-up of the euro, the German government is demanding tighter, Europe-wide controls over national budgets.
Finance Minister Wolfgang Schaeuble warned against increasing liquidity to promote growth, though he has also acknowledged the soaring unemployment of southern Europe needs to be addressed. "We are dealing with almost an economic schizophrenia. Everyone says we have deficits that are too large and a high level of liquidity would make everything more dangerous. And then some say, but we have too little growth, and so we need more liquidity."
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