In recent days, FX desk chatter has been of rising concerns over "Germany’s New Anti-Euro Party." 'The Alternative for Germany' party is set to run in the upcoming parliamentary elections in September with a clear goal: "the dissolution of the EUR in favor of national currencies or smaller currency unions." It also demands an end to ESM payments. As evidenced by the recent vote in Italy, voting intentions in Europe are not just ultra-left or ultra-right wing anti-European, but increasingly mainstream. "Democracy is eroding. The will of the people regarding (decisions relating to the EUR) is never queried and is not represented in parliament. The government is depriving voters of a voice through disinformation..." Ultimately, as Der Spiegel notes, however, the party's success will likely have more to do with the state of the common currency as the election approaches. Should the crisis flare up, so too could anti-euro sentiment. That sentiment in Germany now has a political home.
Anti-euro political parties in Europe in recent years have so far tended to be either well to the right of center or, as evidenced by the recent vote in Italy, anything but staid. But in Germany, change may be afoot. A new party is forming this spring, intent on abandoning European efforts to prop up the common currency. And its founders are a collection of some of the country's top economists and academics.
Named Alternative für Deutschland (Alternative for Germany), the group has a clear goal: "the dissolution of the euro in favor of national currencies or smaller currency unions." The party also demands an end to aid payments and the dismantling of the European Stability Mechanism bailout fund.
"Democracy is eroding," reads a statement on its website (German only). "The will of the people regarding (decisions relating to the euro) is never queried and is not represented in parliament. The government is depriving voters of a voice through disinformation, is pressuring constitutional organs, like parliament and the Constitutional Court, and is making far-reaching decisions in committees that have no democratic legitimacy."
The sentiment, of course, is hardly new. Euro-skeptics are everywhere these days, particularly in those southern European countries that have been hit hardest by the crisis that continues to plague the common currency. And even in mainstream parties, concerns about the path on which the EU currently finds itself are common. But in Germany, as elsewhere in northern Europe, the most vocal critique of the euro has tended to come from right-wing populist parties.
Alternative for Germany appears to be different, though it has yet to produce a party manifesto. Its impressive list of prominent supporters includes a large number of conservative and economically liberal university professors. The most notable name on the list is Hans-Olaf Henkel, the former president of the Federation of German Industries, but it also includes such economists as Joachim Starbatty and Wilhelm Hankel, who were part of the group that challenged Greek bailout aid at Germany's Constitutional Court.
Main initiator Bernd Lucke, a professor of macro-economics from Hamburg, was a member of Chancellor Angela Merkel's Christian Democrats for 33 years before leaving the party in 2011 as a result of euro bailout efforts. "The current, so-called rescue policies are exclusively focused on short-term interests, primarily those of the banks," Lucke told the Frankfurter Allgemeine Zeitung this week.
Alternative for Germany has not yet formally become a political party, though it reportedly plans to do so in the middle of April. Even then, however, it is not yet certain that the party will be able to collect the requisite number of signatures in time to be included on the ballot in general elections this autumn -- a minimum of 2,000 in each of Germany's 16 states or 0.1 percent of each state's population, whichever is lower. "We will make that decision based on the support we receive," Lucke told the FAZ. "But we have been overwhelmed by the public's reaction thus far."
A Political Home
Even if the party does get on the ballot, it remains unclear whether it will attract significant support. So far, it remains a single-issue party -- and even on that single issue there is a lack of clear consensus on exactly how to proceed.
Still, with concern in Germany growing that the country has become the de-facto paymaster for the rest of the euro zone, Alternative for Germany could attract a fair number of protest votes from frustrated conservatives. Judging by the increasing difficulty Merkel has faced in pushing euro bailout packages through parliament in Berlin over the last 15 months, the level of frustration on the center-right could be growing. Indeed, Lucke has said that he is in touch with a handful of euro-skeptic parliamentarians from the Free Democrats, Merkel's business-friendly junior coalition partner.
Ultimately, however, the party's success will likely have more to do with the state of the common currency as the election approaches. Should the crisis flare up, so too could anti-euro sentiment. That sentiment in Germany now has a political home.