Shortly after 5 p.m. last Tuesday, fatigue began to take hold in the courtroom at the Federal Constitutional Court in the southwestern German city of Karlsruhe. The judges sank back into their cream-colored armchairs, and the audience began to thin out.
The lawyers and judges had already spent about seven hours addressing the question of whether the European Stability Mechanism (ESM), the permanent euro bailout fund, is compatible with Germany's constitution. Constitutional law expert Karl Schachtschneider, one of the plaintiffs, made an impassioned plea for a a national referendum on the issue, while German Finance Minister Wolfgang Schäuble warned against the "immeasurable consequences" of a Karlsruhe veto.
It seemed as if everything had already been said by the time Munich economist Hans-Werner Sinn stepped up to the microphone. The professor gave a technical lecture on the economy, but what made his listeners perk up were his bold assessments.
Sinn was sharply critical of what he called a "bottomless pit," and he spoke of "false therapy" and a "machinery of asset destruction" and accused the European community of nations of employing instruments that are doing precisely the opposite of what they are intended to achieve. "They are getting in the way of a cure," Sinn said. When he was finished, the judges no longer had any questions.
It was a performance entirely to Sinn's liking. Before the gates of Germany's highest court, the 64-year-old professor with a Captain Ahab beard was given an opportunity to present himself, once again, in what is currently his favorite role: as a vehement opponent of the prevailing euro policy.
With his tirades against what he characterizes as Europe's bailout monstrosities, from the European Financial Stability Facility (EFSF) to the ESM, Sinn isn't just trying to show that it is possible, contrary to the prevailing view, to express the complicated issues facing the European monetary union in simple terms. He is also demonstrating to the nation that he has added a new type of individual to the German academic community, the economist campaigner.
A History of Bold Theories
Like no other professor, Sinn has long shaped the economic debate in Germany with his bold theories. Around the turn of the millennium, when the German economy was in the doldrums and the country was often referred to as the "Sick Man of Europe," he alarmed Germans with his assessment that labor market reforms would have to be much more severe to bring the country's job slump to an end.
A few years later, he warned that Germany, the world's top exporting economy at the time, had deteriorated into a "bazaar economy," because it had so many foreign suppliers. Now he even promotes the theory that the rescue policies coming from Brussels are not solving problems but are in fact making them worse. "Our children will be forced to go to southern Europe and get our money back," he warns.
Sinn is clearly a successful man. With his varying predictions of doom, the professor has managed to become Germany's most popular and strident economic expert. Some admire him, praising him as what the tabloid Bild called the country's "cleverest economics professor." Others fear him, deriding him as a stubborn nuisance. Finance Minister Schäuble acerbically characterized Sinn as an academic "who takes the task of making his opinion known very seriously indeed."
The Sinn spectacle reached a new high last week. After Chancellor Angela Merkel had agreed to a European banking union at the most recent European Union summit, the professor, in a joint letter signed by more than 200 economists, cautioned against the incalculable risks of such a move. An only slightly smaller group of German economists signed a petition opposing the Sinn letter. The dispute dominated the headlines for days.
Sinn must have been pleased, given that he was the focus of attention once again, because that's his main goal in all of his campaigns. And yet he hasn't always been the agitator he portrays himself as today.
At the beginning of his career, Sinn was more of a silent representative of a group of economists who were making a name for themselves, in Germany and abroad, with their scholarly essays. Even in the United States, economists spoke admiringly of the man they called "Häns-Wörnör."
Banking on Sensation
But at some point every reasonably prestigious German economist faces the question of whether he would rather spend the rest of his career impressing doctoral students in Boston or politicians in Berlin. Sinn chose the latter and, in 1999, took over as president of the Munich-based Ifo Institute for Economic Research, one of Germany's most influential think tanks.
Everything looked as if Sinn were embarking on a typical path in German political consulting, which included his membership on ministerial advisory councils and his candidacy for a spot on the venerable, five-member German Council of Economic Experts, which advises the government in Berlin. In the ensuing years, however, Sinn has discovered a much more direct way of influencing the economic debate.
In 2003, he wrote a book called "Can Germany be Saved?" which combined an analysis of Germany's weaknesses as an industrial center with a call for brutal reforms. His collection of radical theses became a bestseller.
By banking on sensation instead of ivory towers, Sinn has since become Germany's leading economic propagandist, a man whose impact is partly based on the fact that he pursues his theories more doggedly and sells them more stridently than any other professor in the country.
The head of the Ifo Institute spends more time than any other economist giving interviews, writing columns and appearing on talk shows, and he has a unique knack for applying the tools of agitprop.
When he wants to make it clear to the Germans how many risks they have already taken to rescue the euro, he develops an "exposure level" flood watch, which is regularly updated on the Ifo Institute's website. Just to make sure that everyone understands what the gauge means, it also depicts an eagle, the German national symbol, drowning in the rising floodwaters.
Sinn doesn't consider the notion that speed often trumps thoroughness in public relations to be a problem, but rather an incentive. When the euro countries hastily agreed to a bailout fund in May 2010, one that the German parliament, the Bundestag, was expected to ratify only a few days later, Sinn wrote a harsh critique of the plan overnight. Even before the vote, the members already had his damning review in their mailboxes.
Sinn used to say that he had once wanted to be a missionary, to which his wife reportedly responded: "But Hans-Werner, that's what you are."
The desire to convince others of one's insights is part of an economist's job description. With Sinn, the problem is that he shares with missionaries the belief in eternal truths and infallibility, especially his own. But economics just happens to be a social science, not a natural science.
In early June, a few Ifo employees were discussing the next economic forecast with their boss. After prolonged analysis, the experts concluded that Germany would continue to do rather well, as long as the euro crisis didn't escalate. Sinn was skeptical and interjected: "I simply don't believe that."
The discussion continued in this vein for a while, until the head of the economics department reminded Sinn of a similar discussion they had had a few years ago: "We wanted to predict that things would soon be going uphill in Germany again, but you didn't. In retrospect, we were right." Sinn acted surprised. Then he told his employees that they had also wanted to predict an upturn for other countries, while he hadn't. "I was right," he said.
An institute employee who is on good terms with the president calls this behavior Sinn's "intellectual despotism," and says that he is simply determined to convince others. "The boss isn't truly satisfied until everyone has agreed with him."
It is mainly this claim to absoluteness that makes Sinn's euro campaign so questionable. At a time when economists are running up against the limits of their science more than ever before, Sinn insists on being in the possession of unassailable certainties. Economists all over the world are indulging in a new modesty, while the head of the Ifo embodies the hubris of economics. "Sinn is like a motorist who always leaves the highway three exits too late," says one economist, who otherwise views him as a brilliant colleague.
A look at the recent past shows that Sinn's theories, like those of others, have often been wrong. The Hartz series reforms to the social welfare system and long-term unemployment benefits undertaken by former Chancellor Gerhard Schröder of the center-left Social Democrats, which Sinn viewed as insufficient, are now considered to be a key building block of the labor market miracle of recent years.
And the growing integration between German industrial companies and low-wage foreign producers, which Sinn so effectively ridiculed as a "bazaar economy," hasn't weakened but has actually strengthened Germany's export industry.
In the current euro debate, Sinn prefers to focus on pithy statements. When it comes to the scope of euro liability, for example, he adds everything to his list that he can drum up: the bailout package for Greece, the euro bailout funds, the European Central Bank'spurchases of government bonds and the German Bundesbank's claims against the European Central Bank system. Using this approach, he comes up with almost €800 billion ($983 billion) in liability for Germany alone. "The euro system is in the midst of an explosion," he then proclaims, with his arms held high.
Comparing Apples with Oranges
As gigantic as all of this sounds, it has little actual meaning. His calculations include money that has already been spent -- like funds for Greece. But this money also includes amounts that are primarily intended as a deterrent -- like the money in the permanent bailout fund, the ESM. Finally, it includes items for which collateral has been furnished or interest is being paid.
Sinn is comparing apples and oranges. And what makes his apocalyptic calculations even more questionable is the fact that he withholds the costs of the alternatives. In a worst-case scenario, the euro zone would collapse if politicians heeded his advice. The fiasco could cost the Germans €3.3 trillion, according to a recent report by the German Council of Economic Experts.
At the same time, the Ifo president has also made many positive contributions to the euro debate. He was the first to draw attention to the dangerous imbalances in the central bank balance sheets of the euro system, the so-called target balances. And, more than anyone else, he recognized early on that there is ultimately no way around bankrupt Greece's withdrawal from the monetary union.
Playing with Fire
But when it comes to the fundamental questions of whether the euro should be preserved or abandoned, Sinn is playing with fire. There are no easy answers in the euro debate, even if the Munich professor believes he has them. It's no surprise that the number of Sinn's opponents is growing in the dispute among economists over the banking union.
Michael Hüther, the head of the Cologne Institute for Economic Research, said caustically: "If this is the contribution of German economics to the euro crisis, I'm seriously concerned about our profession." Bert Rürup, a former member of the German Council of Economic Experts, is also critical of Sinn's anti-rescue rhetoric. "It isn't enough to sharply criticize current policy and emphasize its risks," he says. "You also have to point to the alternatives, complete with their costs and consequences."
Paul Welfens, an economist at the University of Wuppertal, goes even further, characterizing Sinn as "part of the euro crisis." Welfens argues that Sinn, with his alarmist approach that pays too little attention to the facts, is only serving to make people nervous.
Sometimes it seems as if the controversial economist recognized himself that his recommendations are hardly sufficient to overcome the euro crisis.
Sinn is sitting in his favorite restaurant in Munich's English Garden, eating a plate of schnitzel and fried potatoes. He is talking about what he would do differently if he were chancellor. He is asked what concrete mistakes Chancellor Angela Merkel has made.
Sinn reflects for a moment, and then he says: "Is Merkel doing something wrong? If she is, I don't think it's serious." Then, after a pause, he adds: "I wouldn't want to be in her shoes."