EU fiscal policy

[Sven R Larson <larson@xxxxxx>]

Today's edition of the Danish newspaper Information reports that the EU
Commission is about to take a new step in the direction of tightening
fiscal policy rules on the EU member countries. "Unfinanced" tax cuts
will be more or less impossible - meaning a more aggressive enforcement
of the Maastricht Treaty's rules on public sector deficits and debts.
The intention is apparently a tighter scrutiny of the single countries,
where ban on active deficit spending will be enforced in way that
resembles enforcement of rules on "tax harmonization". (I'm sad to
notice that the initiative to this tightening came from the Danish
government, and was immediately applauded by the other 14 EU states.
Obviously the Danish government wants to outlaw its own expansion from
1993...)

If anyone believed that Europe would not be moving towards a
continent-wide hard fiscal regime, then it is time to think again. The
Maastricht treaty was no Potemkin facade - it was the first step towards
perpetual austerity. It is time now more than ever to gather a Post
Keynesian protest against this institutionalized superstition! I know
there are well elaborated efforts in America in this direction - but
where are my fellow Europeans? France? Germany? Britain? Italy?


/srl


--
Sven R Larson
Assistant professor of economics
Department of Social Sciences, Bldg. 22.1
Roskilde University
Pb 260
DK-4000 Roskilde, Denmark
Phone: (+45) 4674 2910