The economists' outburst suggests little readiness to get into detail. It appears more an attempt to fuel public fears

OR PERHAPS they can. A letter from 172 German-speaking economists published by the daily Frankfurter Allgemeine Zeitung (FAZ) lambasts the steps taken towards a banking union by euro-zone leaders at a summit last week in Brussels. It has unleashed a counterblast from government heavyweights and their economic advisers, leaving the public even more confused.

The euro-zone chiefs were far from agreeing on anything like a banking union—but let that pass. The 172 academics are indignant and warn of dire consequences for German citizens when they end up guaranteeing balance-sheets three times the size of all euro-zone public debt.

A banking union means assuming “collective liability for the debts of the banks in the euro-system” thunder the professors. “Dear fellow citizens, please relay these concerns to your constituent MPs; our elected representatives must be alerted to the dangers that are threatening our economy,” they say.

Europe’s leaders actually agreed on two things: to work towards joint bank supervision by the European Central Bank, and that euro-zone banks may be recapitalised directly by the European Financial Stability Facility and its future replacement, the European Stability Mechanism.

The most a banking union, if it indeed comes, is likely to guarantee is the deposits of private savers up to €100,000—no more than each EU member state already guarantees at a national level. True, even that would be a lot of cash if there were a systemic bank run, but avoiding one is precisely the goal of joint supervision.

The professors’ outburst suggests little readiness to get into detail. It appears more an attempt to fuel public fears that politicians are taking Germany down a slippery path towards assuming all euro-zone debt. Judging by the online comments they are striking a chord even with sophisticated FAZ readers. “At last, clear words from the professionals,” writes one.

Predictably, the government has come out fighting. Angela Merkel, the chancellor, urged people to study the actual decisions taken in Brussels. Wolfgang Schäuble, the finance minister, spluttered: “I find it outrageous. Economists should be more responsible in the way they handle the concept of bank debt.”

Only a handful of the signatories are much known outside their faculties, including Hans-Werner Sinn, head of the Institute for Economic Research in Munich, and Klaus Zimmermann, former head of the German Institute for Economic Research in Berlin.

A riposte from seven economic heavyweights (including Peter Bofinger and Bert Rürup, member and former member respectively of the Council of Economic Experts, which advises the government) has been posted on the website of the Handelsblatt, a business daily, under the headline “No bogeymen!” In these uncertain times, they write, “it cannot be the job of economists to unsettle the public even more with cliché-ridden assertions and questionable arguments.”

The 172 professors have certainly broken new ground. The most remarkable thing, says one FAZ reader, is that “so many economists could agree on a single text :-) – incredible.”