European Fiscal Unity.

[Satou]

http://www.nytimes.com/2011/09/06/business/global/reluctantly-europe-inches-closer-to-a-fiscal-union.html?pagewanted=all%3Fsrc%3Dtp&smid=fb-share

I saw this on my FB stream from another friend and was wondering what every one's take on this idea of a Unified fiscal responsibility for Europe.


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Now I haven't heard anything about this from family that has been living in Europe. However after reading this it feels like there are outside forces working at attempting to unify Europe even further - like american financial/business men influencing other financial advisors of Europe. And it seems extremely sneaky/dishonest that they are planning this behind the scenes instead of being forthright with the population and the countries about their ideas/plans. Especially since this system has the potential to very much become like America's piss poor fiscal responsibility and would in essence have the same issues we have when it comes to taxation, debt, and etc.



So basically it feels like a grasp at socialism, in the sense as some states like California are facing - that our tax dollars and/or revenue goes towards helping the 'needy' or less fortunate and the super fortunate. (both of which do not always need the help that is bestowed upon them - that at times they do take advantage of it like people purposefully living off of welfare and illegal immigrants). And never goes towards benefiting the country and those who are stuck paying for it - i.e the middle class.



I am glad that this idea is not only being opposed by some of the successful countries like Germany but by the smaller countries who maybe struggling that this union seeks to benefit. The successful countries do not want their tax dollars to go towards bailing out other countries that borrow themselves in to debt like Greece and they feel like this particular unification would alienate voters and potential voters. And smaller countries don't want outsiders telling them how to run their government and basically control them financially.

[Dr. B]

I don't see it as a grasp at socialism, especially in the context you defined; building a robust welfare system, perhaps. The unification of financial policy-setting institutions will not solve the problem. One of the biggest reasons for the Eurozone crisis was that all participating countries had fixed exchange rates of goods that could be substituted by the production endeavors of other countries, at prices that did not reflect the cost of production. Consequently, countries which have historically been driven by exports could not compete with economic powerhouses like Germany because their goods were no more expensive, relative to the smaller country.

So what's a central fiscal authority going to do? Will they establish exchange rates between countries to accomplish exactly what happened before the EU, only this time allowing no domestic sovereignty? Their union isn't like the U.S.'s, why would they expect to be able to copy our model of currency unity?

[Rani]

Honestly, I think the US Dollar controlled the global economy for far too long. At least that's the way most non-American people seem to feel. It was overall our melt-down that sent the world into a domino effect fiscal failure. So assuming you're not an American, you have a truly terrible American government to try and deal with that believes in it's own sense of entitlement, and an American uber wealthy class making what is apparently an effort to bring back the dark ages where a few held wealth/power and work was at the level of serfdom or slavery by taking advantage of the lower wages and living standards around the 3rd world. Now add in the fact that they're a nuclear power, who in fact is the only nation to have actually used nuclear weapons against another nation. Hell, looking at it from their point of view, I'd hate us too and be trying to make my own economy dominate. If out of nothing but the sheer survival instinct of getting Armaggedon out of the hands of toddlers with too much power and money already.

There's absolutely no doubt in my mind that the plan is for a global currency to rival and try to "dethrone" the almighty American dollar for good. Europe is only the first step.

'Rani

[Fumo1]

The problem with a global currency is the same problem the Euro is having. If each country sets it's own fiscal policy then there is no central way or authority to control each countries internal policies. At whether the US has a sound fiscal policy or not at least all 50 states move in the same direction via the Fed. How long before Germany and the financially responsible states get tired of paying for other countries socialism? Globalization or a global currency would be like the Euro except a thousand times worse. As bad as the US is at times there is worse.