Euro Crisis and Renewable Energy

I will be speaking at the Japanese Society for Studying German Constitutional Law on the decision of the German Federal Constitutional Court of last September about the ESM Treaty and the Stability Pact

That’s an interesting topic on its own, but I just realized from reading this interview with Bloomberg New Energy CEO Michael Liebreich that there is a connection to renewable energy.

From the interview:

A. The European crisis has crushed the sector’s most important geographic market. How are you going to invest in European projects when there is a question mark over the survival of the Euro? The average commercial bank cannot fund a project in a high-risk country like Spain, Greece, or Portugal, the best countries in Europe for clean energy. But at some point this will resolve: There will be an end to the European pain.

It is true that it makes sense to build solar where the sun shines. That would be exactly the southern European countries that are hit by the Euro crisis.

Until realizing this, I was opposed to Germany bailing out Greece and other EU states. If they are unable to balance their budgets, let them go bust and the buyers of their risky bonds get some haircuts.

But I might want to reconsider. If this kind of policy helps with getting solar up to speed in southern European countries, that’s a very important consideration.

Also, while I didn’t agree with the decision not to just let other Member States default, it’s a done deal now. It better work out one way or other.

On the other hand, if you are worried about “the survival of the Euro”, investing in stable long-term renewable projects with guaranteed income streams over the next decades might seem to be a good idea, exactly because with all sorts of financial problems ahead one would want to reduce risks. It sure beats investing in Greek bonds if one is interested in stability, even after the ESM and Stability Pact in place.


Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003,

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