“Just missing the mark” – this is how Jürgen Chrobog, chairman of the BMW Foundation’s board of directors, humorously yet appropriately summarized the interesting and intense discussion at the BMW Foundation’s Conference Room. Attended by 80 personalities from Bavarian business, academic, political and media circles, the 3rd Summit Lecture primarily focused on the debt and euro crisis and the frequently invoked “transfer union,” i.e. the future scope for social policy, but not social policy as such. 

It was hardly surprising, however, that the debate, which took place on the eve of the EU Summit about the future of the European rescue fund, was dominated by the big economic policy issues – even less so as the panel, which was moderated by the Süddeutsche Zeitung’s region and Bavaria editor Ulrich Schäfer, featured two experts on international financial and economic developments, the Bavarian minister of finance Georg Fahrenschon and economist Kai Konrad. 

In his opening statement, Professor Kai Konrad showed with brutal clarity that it is not possible to have “debts without atonement” – thus the title of his most recent book – and that hoping for economic growth (unjustly criticized in his view) and low interest rates is not enough to prevent exploding state debts. According to Konrad, it also takes an autonomous policy of austerity on the part of the EU member states, a rigorous stabilization policy on the part of the European Central Bank who is to refrain from public debt purchases, and possible debt restructurings in the euro zone. 

Finance Minister Georg Fahrenschon, in his presentation, argued for a sustainable financial policy characterized by budget consolidation, which would provide the welfare state with the necessary scope for action. In his view, this has to be accompanied by an economic policy that gives the right impetus for growth. As models for the euro zone Fahrenschon mentioned the national debt brake in Germany as well as the pioneering role of Bavaria, which has had a balanced budget since 2005 and thus has come out of the crisis more quickly and in better shape. 

Both speakers agreed that the transfer union, due to the planned expansion of the rescue fund, was “on its way” and that the “Pact for the Euro,” which had been agreed upon in return, was not binding. It seems there is no reason to take an optimistic view of the future.

Speakers