Photo: AP/Markus Schreiber
You probably haven’t heard of them, but they could be quietly deciding the fate of the euro.The German “Council of Economic Experts” is an academic body closely involved with government policymaking, made up of five appointees with various economic affiliations.
They’re sometimes referred to as the “five wise men.”
While neither the German Parliament nor the central government take recommendations from the Council unconditionally, policies the latter has supported have a funny way of becoming enacted. For instance, their unanimous endorsement of a 50% private sector haircut on Greek bonds preceded adoption of the idea by EU leaders.
The most recent suggestion by the council is a plan to create euro area sovereign bonds (dubbed “eurobonds”), which would allow the 17 euro area sovereigns to issue debt jointly. The most important part of this proposal are tax consequences and economic restrictions that would kick in if a country failed to adhere to stringent regulations.
With that hot topic back on the table, will the Council’s influence be enough to sway the dubious German public?
Membership: 1994-1999, since March 2003
Franz is a career economist with a penchant for free market economics and reform. He has focused his studies on labour markets and serves as a professor at the University of Mannheim.
Source: University of Mannheim
Member since: March 2011
A career economist and current professor at the University of Freiberg, Feld has been close to government decision-making since before he became part of the Council earlier this year. He is a staunch supporter of strict regulations on sovereign spending in the euro area, and says that this must precede further fiscal integration. He is particularly interested in public finance and economic psychology.
Member since: March 2004
Bofinger is the only Keynesian economist on the Council, and a proponent of minimum wage. He also opposes the restrictive policies of the European Central Bank, arguing that debt issuance policies in the European Monetary Union are arbitrary. He is a macroeconomics professor at the University of Wuerzburg.
Source: Wikipedia (de)
Member since: March 2009
President of the Rheinisch-Westfälisches Institute of Economic Research and professor at Ruhr University, Schmidt is an economist focusing on population and labour issues. He has previously been a professor of econometrics as well as an editor of the Journal of Population Economics.
Member since: August 2004
The Swiss Weder di Mauro is the first woman and first foreigner to be appointed to the Council. She has been an economist World Bank and the IMF, and served on the Council of Economic Advisors of Switzerland. Weder di Mauro has also been a visiting scholar at Harvard University, the National Bureau of Economic Research, and the United Nations University in Tokyo, among other posts.
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