There was some turmoil around the economist recently because of his departure as an economist.
(Photo: dpa)
Berlin The former chairman of the Expert Council of Economic Experts, Lars Feld, surprisingly does not move to Austria. The 55-year-old has turned down the offer to head the Institute for Advanced Studies (IHS) in Vienna. This emerges from a message from the Freiburg Eucken Institute, which continues to lead the field, on Friday evening.
This was preceded by months of uncertainty about Feld’s future, in which both his previous employer and the financiers of his new institute were involved.
In June 2021, the IHS declared that it wanted to guide Feld to the Alpine Republic. By autumn, as it was officially communicated at the time, those involved wanted to come to an agreement. The position at the IHS had become vacant because the previous head, Martin Kocher, was appointed Minister of Labor in the new Austrian federal government. But to this day, the think tank, which is considered one of the most important economic institutes in Austria, is without a leader.
According to Handelsblatt information, the reason for the months-long stalemate was, among other things, a lack of agreement between Feld and the University of Freiburg. The scientist has been teaching there since 2010 and is President of the associated Eucken Institute.
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If high-ranking economists receive a call from abroad, it is common in Germany for their previous university to release them for the period. But it is not obligatory.
Probably no agreement with the University of Freiburg about the return option
And so the university, led by the state of Baden-Württemberg, had long refused to release Feld, and instead demanded that he go completely. Feld’s contract at IHS would have been temporary. If there hadn’t been an agreement on further cooperation afterwards, he would have been left with no option to return.
The IHS had given Feld until the end of the current week to make a decision, report those involved. Apparently, there was no compromise between Feld and the university. The message says that Feld accepts the “offer to stay” from Freiburg, the topic is not discussed further in the official letter.
Another reason for Feld’s hesitation is the restructuring of the Austrian economy. Feld described this quite openly in his message, even if the IHS made him an “attractive offer”.
The Austrian National Bank (OeNB) is responsible for financing the IHS. In the future, the OeNB wants to support other economic research institutions in addition to the established institutes around the IHS.
However, it looks like the amount of funding will remain the same, although it will have to be divided between more institutes. It is possible that the IHS will be left with less money in the future. In detail, it is about the question of whether the National Bank is switching from basic to project financing.
“The oral assurances that the IHS would not suffer any disadvantages as a result were followed up by the OeNB in the provisional financial commitment for 2022, but not in principle,” says the Eucken Institute’s statement.
Posse about economic wise men posts
Nevertheless, the IHS had to be restructured, “not least because the IHS had to be significantly strengthened, especially in the area of finance and thus in the core area of Feld’s research interests. This would require considerable effort, would not be without quarrels and would lead to strains.”
Feld’s clear words are not surprising, even in technical debates this is his way of communicating. Born in Saarbrücken, he is something like the last bastion of ordoliberalism among the German economists who are present in the media. In the recent past, economic researchers who prefer government intervention and a lax debt policy have always been heard.
Feld, on the other hand, considers state intervention to be necessary only in the very rarest of cases and advocates a rigid financial policy. It was not for nothing that his Freiburg chair was called “Economic Policy and Regulatory Economics”. As head of the Eucken Institute, he continues the ideas of Walter Eucken, who founded the Freiburg School of Ordoliberalism.
It’s not the first time Feld has been at the center of staff disputes. Last time, however, he could only watch. Feld has been a member of the Advisory Council since 2011, whose members are appointed by the federal government. He has been chairman since 2020 and his contract expired in spring 2021. The Union wanted to extend it. However, the SPD vetoed this. The views of the economist were too liberal for the Social Democrats.
Federal Finance Minister Olaf Scholz (SPD) would rather send an economist to the committee, who is closer to the SPD, in the form of Düsseldorf economics professor Jens Südekum or DIW President Marcel Fratzscher. However, the Union rejected this.
In the end, no one was appointed to the Council of Economic Experts, so the five economic experts have to continue as four for the time being. The new federal government is now in the process of agreeing on Feld’s successor. The traffic light has not yet made a decision, according to government circles.
More: Lars Feld on “the pension as a black spot in the coalition agreement”