20 June 2011


The Economist (on the Greece crisis) sums up what's wrong with the EU right now:
Sharing budgetary resources, either through direct transfers or through the issue of “E-bonds” underwritten by the euro area’s taxpayers, is anathema in Germany, where the notion of a “transfer union” in which the better-off subsidise the worse-off is political poison, not least because of the vast transfers from western to eastern Germany since reunification. Northern taxpayers would also recoil from the idea of a future “ministry of finance of the union” which Mr Trichet recently floated.
Actually, what we need is precisely a "transfer union", an EU-wide fiscal policy settlement that does for the struggling economies of the EU periphery just what German unification did for the former German Democratic Republic.  I understand the German right's antipathy to anything of the sort. What I can't fathom is why pro-EU social democratic politicians haven't made the case, at least in principle, even if they're running scared of the populist anti-EU right in electoral contests. And Germany still has obligations to the rest of Europe: remember, ah hem, the Nazis.

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