Text 23312, 84 rader
Skriven 2011-12-07 07:39:34 av Robert Bashe (2:2448/44)
  Kommentar till text 23302 av Roy Witt (1:387/22)
Ärende: See what I mean...
==========================
Roy Witt wrote to Robert Bashe on Tuesday December 06 2011 at 14:35:

RB>> The original idea was that the Euro, a common currency, would
RB>> automatically lead to alignment of the fiscal and tax structures of
RB>> the participating countries. No provisions were made to _ensure_
RB>> that, however, and it simply didn't happen. As a result, you have a
RB>> large number of different fiscal and tax structures in the Eurozone,
RB>> but a common currency. Naturally that only works as long as times
RB>> stay good - we're now experiencing what happens when times are not so
RB>> good.

RW> Interesting that the fiscal/tax structures of the 50 states is tied to
RW> a common currency and it works so well in comparison.

Because the national fiscal/tax structure is uniform and comes from Washington.
There is no such thing in the EU, and that's the weak point of the system.

Mind you, I wasn't talking about things like the state sales or income taxes in
the USA, or about ordinances and policies that only apply within a single
state, but about the policies that govern the entire nation. Since the EU isn't
a single nation, it also has few uniform policies. Originally, it was only
conceived as a free trade zone and then developed into a loose (very loose at
times) association of _very_ soverign states in which, basically, everyone is
still for himself. That's why it's so hard to harmonize institutions and
policies throughout the entire EU - in the States, Washington makes national
laws and they override State laws. Here in the EU, every single EU member must
formally agree to a measure (with some _minor_ exceptions allowing majority
decisions) or it simply isn't valid. And in some member states, a national
referendum is required for some decisions, which makes the situation even more
difficult.

It's a little like the situation would be in the States if there were no
federal income tax (the federal government weak and depending on subsidies from
the states), no uniform military, no ICC, if every state could make foreign
treaties on it's own, and all 52 states had to ratify measures affecting the
whole. Add to that the different languages and cultures, and you have a
terriffic coordination problem even if everyone deals in good faith - and you
can't even assume that.

RB>> In contrast to single currencies such as the Dollar, the Yen and the
RB>> Renminbi (Yuan), all of which are subject to a _single_ fiscal and
RB>> tax system, the Euro has this fatal flaw, and has had it from the
RB>> beginning. The question is whether it can be eliminated or at least
RB>> reduced at this point in time. Nobody really has an answer to that at
RB>> present.

RW> There is an answer, but it won't happen. Restructure the EU to
RW> something like the USofA and make the Union states model their tax
RW> structures the way our tax is done.

You're right: it won't happen. The differences among the EU members are simply
too great for that. Just imagine how things would look in the States if you
had, say, 20 "official" languages instead of one - and that's ignoring the
different histories and cultures. Also, and this is the main point: not one of
the EU members is going to give up more sovereignty than it really _must_ in
it's own interest. There is no interest in a "United States of Europe", and a
great deal of suspicion and fear that some EU members could be aiming at such a
thing ("naturally" to enhance their own power at the expense of the other
members).

RW> Well it seems that Merkel and Sarkozy have come up with something that
RW> they wouldn't even have given a second thought a year ago.

RW> "Countries that rack up too much debt should be subject to penalties
RW> that they will not be able to fight, they now say."

They can start by toeing the line themselves. One of the first violators of the
so-called "stability pact" for the Euro (max. 2% added debt annually) was
Germany, and France wasn't far behind. Neither, incidentally, was ever
sanctioned for that. But others were. That lesson hasn't been lost on the other
EU members. So any ideas such as you mention will be a hard sell - people here
are already talking about "Merkozy" (Merkel + Sarkozy) "ruling", or attempting
to rule the Eurozone, and nerves are wearing thin.

RW> Well, they can rest in peace for now. Belgium announced that they have
RW> a new PM and Cabinet...

Well, _that's_ good news at least. We can use more of that in the present
situation.

Cheers, Bob

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