‘Europe must avoid focus on austerity that helped bring Nazis to power’
“Due to misleading theories, a single-minded concentration on austerity policy led to mass unemployment, a breakdown of democratic systems and in the end to the catastrophe of Nazism,” Mr Nowotny said in a panel discussion in Vienna. “We must avoid the mistakes of the 1930s. We really have to be aware that this is an underlying theme.”
The governor of the Austrian central bank said the determination to avoid those mistakes was present in discussions among central bankers when the financial crisis started in 2007 and 2008 and the fact that US Federal Reserve chairman Ben Bernanke was a researcher of the Great Depression was an important driver of global central banks’ reaction at the start of the crisis.
“This enabled him perhaps to have a very close feeling, perhaps a better feeling than many of us, for the dangers that were arising.
“We have to be aware we have been very close to meltdown and it was only due to massive efforts of the central banks to avoid such a catastrophic development” that it’s been prevented, he added.
France’s anti-immigrant National Front party won two seats in parliamentary elections yesterday. Greece’s right-wing Golden Dawn party won 6.9% of the vote in elections, gaining 18 seats.
Mr Nowotny said that the euro is working as a currency and will continue to work. “The euro as such is fully functioning, and I’m sure it will function for an indefinite and long period.”
Steps toward a banking union will be the most important issue for the European Union “for the foreseeable future,” he said.
