The European Conservatives and Reformists Group (ECR) in the European Parliament has criticised the European Commission’s new reflection paper on the future of the euro and monetary union. One by one, four of the group’s German MEPs explained the paper, which was published on May 31, is hugely flawed.

“The response of the European Commission once again reflects a capitulation in the face of the economic problems within the Eurozone,” said Bernd Lucke. “Instead of carrying out political reforms, this measure once again aims to breach the non-aid clause in the European Treaties. In fact, the proposed European Safe Assets are a new edition of the Eurobonds, which are intended to mutualise the Eurozone debt.”

In a similar vein, Joachim Starbatty said: “If tranched EU government bonds actually generated demand then investment banks would have established them long ago. Since the so-called sub-prime crisis in the US, such credit tranches are known for their catastrophic consequences.”

Ulrike Trebesius added: “The proposed bonds are meant to bring relief to the south of Europe by means of mutualisation and to protect Germany from mutualisation. This is illogical and does not work. I am anxious to see how the Commission intends to make its ideas understandable to the citizens of Greece and of Germany. The new proposals will further extend the Eurozone’s agony.”

Hans-Olaf Henkel called on the Commission to include one “important option” for the euro – the dissolution of the euro and return to flexible national currencies. He said: “As a first step, Greece should be offered a generous debt cut in return for leaving the Eurozone. This allows the Greeks to regain economic growth, saves the so-called donor countries the financing of future rescue packages, and it does not cost the creditors anything, because the money is irrevocably lost anyway.”