Re: The curse of Europe

["Hugh Whinfrey" <econ@xxxxxxxxxxxx>]

Sven writes:

> A highly probable development is towards a centralized fiscal policy
> regime. There are already now rumours of a coming EU tax in circulation,
> although I haven't seen any formal proposal yet. Maybe it's just wishful
> thinking on behalf of EUrophoristic politicians, but it makes a whole
> lot of sense to change the treaty in that direction. A central fiscal
> policy entity - in practice, a federal European government - would be
> more confident and need rely less upon the Maastricht treaty to give it
> credibility. Then the percentage paragraphs would either be done away
> with (wonder if that's constitutionally possible) or relaxed far enough
> to lose practical meaning. I agree that the present situation and the
> integration process in the EU is crazy, viewed in comparison with the
> evolution of the US, and this is why I don't want more of institutional
> integration at this point. But there is one exception: now that the
> monetary union is in place it's necessary to form some sort of central
> fiscal policy entity, because - just as you point out - it is impossible
> to coordinate 12 (and soon perhaps as many as 18-20) countries in fiscal
> policy efforts.

The real question is how do you keep 12-20
different governments fiscally responsible, to
each other at least, while avoiding a political
union and while promoting a high level of
confidence in the banknotes of their common
fiat currency.

Try thinking out of the box for a moment..

The point is, there is a very obvious solution
which is being ruled out categorically.

Hugh