Constantly we have politicians telling us the problem with the Euro is the lack of fiscal integration. This is total garbage.
Why did government debt appear to be okay before the Euro?
Because the governments had flexibility ie they could print their own currency as when they needed to.
What changed with the Euro?
Countries lost this flexibility.
The reason we see problems with the Euro is that governments have lost flexibility.
Further constricting their options by tying the governments into a closer fiscal union will obviously lead to even more problems.
This is obvious to anyone with a functioning brain cell and yet supposedly intelligent people have completely bought into the propaganda.
So what is the answer?
Again, obviously the answer is to restore the flexibility that these countries had with their own currencies. or the next best thing.
In other words, less fiscal integration is the answer. Countries in the Eurozone need to be given greater flexibility on taxes and regulations so they can control their fiscal deficits.
What will happen with closer fiscal integration?
Inevitably the debt problems are going to become worse because the governments will not be able to compete their way out of their problems because their hands will be tied on taxation and regulation.
If fiscal integration continues then inevitably there will need to be a mechanism, whereby the richer countries will end up paying more tax and giving this extra tax revenue to the countries who have a deficit.
Who will control this extra tax?
Of course it will be the EU. And with this, the ECB will create another customer which their member banks will be able to lend to. In short, profits for the money centre banks will increase at the expense of the European population.
Successful countries will be paying through increased taxes.
Deficit countries will pay because their hands will be tied with regards to improving their own productivity and competitiveness.
The only winners will be the money center banks, the banks that have access to the ECB. The losers will be everyone else.
In short, for the sake of the people of Europe, fiscal policies of the member countries need to diversify so each country can address their competitive disdavantages