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Merkel called on Europeans to come together, saying that deeper coordination of economic and finance policies is needed.... "We have a common currency, but no common political and economic union," she said. "And this is exactly what we must change. To achieve this -- therein lies the opportunity of the crisis."
It is not possible for the euro zone to continue without a clearly identified economic government. We cannot go on like this," Mr Sarkozy, whose country currently holds the rotating EU presidency, told MEPs gathered for a plenary session in Strasbourg.
here is a need for a quantum leap in the governance of the euro area.
Nevertheless, the stark realities of the current situation strengthen the commission’s hand. These are set out in the preamble, which notes that:
the current crisis has no precedent in our generation;
it has underlined the interdependence of the euro economies;
public debt was not reduced sufficiently over the past decade;
vulnerability was aggravated by persistent imbalances;
the exceptional combination in Greece of lax policy, structural imbalances and statistical misreporting led to an unprecedented debt crisis.
The objective is to prevent a repeat of the Greek situation where one member state jeopardises the entire euro area. To this end, the commission proposes: better ex-ante co-ordination, ie get countries to run broad proposed budgetary parameters past Brussels before they are finalised and go to the national parliaments; penalties for misbehaviour; legally enforced compliance with treaty obligations; much greater emphasis on debt and deficits; and a speedier process for dealing with breaches of the rules. The entire budgetary process would be shifted forward and all this should start in 2011.
This is not tax harmonisation; rather it deals with broad budgetary parameters and will obviously have to respect treaty provisions.
Such measures would be supplemented by deeper and broader economic surveillance including peer reviews. This would encompass all the usual economic indicators, with a particular emphasis on asset price booms.
Guidelines and warnings would be the order of the day, with the recommendations going so far as to address both revenue and expenditure, as the crisis has shown that the composition of government revenue is important.
The commission would issue early warnings directly to a member state. The recommendations could address labour, product and services markets as well credit growth and house prices, with euro-area ministerial votes to encourage compliance.
One certainty is that the commission will get powers to audit national statistics. It proposed this following earlier problems with Greek statistics but was turned down by the ministers.
Finally, the commission asserts that emergency assistance in the form of lending to a member state is not contrary to the Lisbon Treaty.
The first priority is to make the recently announced measures operational; it will then propose a permanent crisis resolution mechanism.
Eurozone nations should take a big step towards integration with a new system of cross-border budgetary co-ordination, according to the head of the International Monetary Fund.
said on Wednesday that he would push to see tougher fiscal rules introduced for the bloc, to target overall debt levels, in line with French and German calls.
called for enhanced fiscal discipline in the eurozone and greater co-ordination in economic policies, in order to move toward a new growth model.
“Stability in the eurozone is essential for all member countries, not only Greece. Consequently, it is vital that we bolster fiscal discipline between member states and guarantee strict compliance with the Stability and Growth Pact." Yet that alone is not enough," added Zapatero, whose country is currently presiding the European Union. “Precisely in order to facilitate greater fiscal discipline, we need greater co-ordination between our economic policies and in tackling the structural reforms that will help us move toward a new economic growth model.”
Originally posted by gambon
But at the same time sarkozy is threatening to withdraw from the euro....
Originally posted by gambon
"Sarkozy went so far as to bang his fist on the table and threaten to leave the euro,” said a Spanish politician quoted in El País."
Originally posted by SeekerofTruth101
May I be wrong in my analysis, and hope to be wrong, because if I am right, only more innocent blood will be shed on purpose.....
Originally posted by Dermo
reply to post by SeekerofTruth101
Worst case scenario's.. Nationalism causes hatred and war.. Globalization causes extremism and exploitation..
Eventually we will find a happy medium but the main point in my mind is that we keep pushing for it.. Backwards momentum will only ruin us.
Most people on this site think of a world government as an authoritarian dictatorship whereas that is the least likely outcome.. What is more likely is that it would be a strong world court and parliament.. With only the power to chastise states that break the law..
[edit on 16/5/10 by Dermo]
Originally posted by alienesque
wrong..sorry..the worst case scenario of a world government is total war against the people by this government..no freedom..no right to life...nothing...
'Eventually we will find a happy medium'
why are you so optimistic?..governments have alwayss been corrupt..why should the most powerful government that ever existed all of a suddden be decent?