To Speak of Solidarity in this Context Is Perversion

Published on Current Concerns no 19 (Source: Frankfurter Allgemeine Zeitung of 6 September 2011), an Interview with Richard Sulík, Questions by Karl-Peter Schwarz, Sept. 29, 2011.

Slovakia refused the first aid package for Greece. In an interview with the “F.A.Z.”, Richard Sulík, President of the Slovakian Parliament, speaks about the dubious majority in favour of the Euro rescue umbrella in parliament and of the ratification process. 

Frankfurter Allgemeine Zeitung: In the EU, there are ongoing discussions about a common economic government for Europe, the need of a European finance minister and the corporation tax to be harmonized. Do you consider these proposals to be realizable?

  • Richard Sulík: Economically, they make no sense and in administration they are not manageable, thus not realizable. In Slovakia the parliament, not only my party is strictly against this, and the Christian Democrats rejected a tax harmonization as well. The rage of excessive regulation is even worse than at the time of the Comecon. In the countries of the former Eastern Block, resistance is mounting. The EU is well advised not to let all sympathies go in favour of an economic government. Europe is drawing strength from diversity and competition. Now, they are trying to standardize everything. But we are not all alike.

Is this the fault at the bottom of the present crisis?

  • No. The biggest mistake is that the club of the euro zone is disregarding its own rules – the Lisbon Treaty, the Statute of the ECB. I am surprised how impertinently these rules are being ignored and that this is simply tolerated. If one were abiding by the rules, however, Greece would have gone bankrupt a long time ago and you wouldn’t believe how fast Italy would start saving. Why should Italy want to enforce saving programmes, today? It’s enough to hold up their hands to receive money from the ECB and the ESM in future. This money is available at 3.5 per cent. Why should Italy endeavour to sell its certificates of debt to financial investors, for which it might have to pay 5 per cent as interest? Italy cannot be rescued. It simply has to save money.

On rejecting the first Greece package, the Slovakian government was still united. Now, with the second package and with the ESM, your party stands alone. Even Finance Minister, Ivan Miklos was in favour of the ratification.

  • I am very sorry, since for many years we were of the same opinion in almost all questions. He says that the banks participate in helping Greece, as well. But this requires a closer look. Banks exchange Greek dept certificates up to an amount of 37 billion. Half of them are exchanged one to one against new bonds of the Greek government. They are fully secured (AAA security), in other words, just as risk-free as German federal bonds, but at a higher interest. Namely, in the first 4 years the banks receive 4 per cent, in another 4 years, 4.5 per cent and finally, 5 per cent for additional 20 years. With the second half of these 37 billion, however, there is a haircut of 20 per cent, which means that they give 1000 and get back 800. These 800, however, are lent at an interest of 6.8 per cent for the following 15 to 20 years. I have checked that: This way, the banks make 500 million euro and more per year. For them, this is simply business.

What about European solidarity with Greece?

  • To speak of solidarity in this context is perversion. It is true, the banks are endangered. Well then some banks may go bankrupt. The state should guarantee the asssets which private persons hold in these banks. This is what I recommend. It would be much cheaper than those rescue packages.

When will the Slovakian National Council vote on the ratification?

  • The process of ratification is most likely to drag on until the end of the year. The parliamentary deadlines have to be met. Also, the Slovakian government parties stated that their decision is to take place only after all other countries have voted on the matter.

At this vote, your party shall go down fighting?

  • Why, no. Resistance is growing. I am not sure whether Mrs Merkel will be able to push this through before she falls. On numerous occasions, she pulled the emergency brake, once it became too dangerous for her. Think of the Kirchhof case.

… (full text).

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