Article Tools

Controversy About Nowotny

Published: June 21, 2012; 20:03 · (Vindobona)

Ewald Nowotny, the governor Austrian Central Bank (OeNB) argued that the austerity policy in the 1930s caused the rise of the Nazi regime. A wave of indignation emerged.

Controversy About Nowotny / Picture: © Wikipedia / Christian Wirth (Wirthi)

Austria´s governor Ewald Nowtny caused more attention than he would like. This week, Nowotny stated that the austerity policy in the 1930 contributed to the rise of the Nazis in Germany. Nowotny´s statment caused a massive media interest.

Nowotny´s comparison was interpreted as massive critique on the austerity policy of Germany´s Chancellor Angela Merkel.

„Due to misleading theories, the one-sided focus on austerity caused mass unemployment, the collapse of democratic systems and in the end, the disaster of the national socialism. Me must avoid the mistakes oft he 1930s.“ Nowotny stated.

German media criticized Nowotny sharply. However, Nowotny is not the first economist who referred tot he dangers oft he 1930s. The U.S. economist Nouriel Roubini and the historian Niall Ferguson drew the same conclusions as Nowotny some years ago. Also Nowotny himself warned in 2009 that the crisis oft he 1930s must not be repeated.

Today, OeNB reacted with an own press release. OeNB explained that Nowotny indicated that the „economic crisis in the 1930s was not only an economic disaster, but also contributed tot he rise of  the national socialism.“ The economic historic statement of Nowotny would not have a link tot he current fiscal policy, OeNB argued.

„Above all, the governor defends himself to be brought to a counterpoint against Germany and Chancellor Angela Merkel.“