“The road to hell is paved with good intentions. “ (Bernard of Clairvaux)
The current crisis regarding the European Monetary Union is a crisis of competence distribution.Â Â This much is clear when one considers the fact that the Euro is experiencing a threefold crisis: banking, governmental debt, and balance of payments are all plaguing the EMU at the moment. Far too many players have their hands in the pockets of others, “moral hazards“ are occurring more frequently, and competences are becoming blurred. Despite the Fiscal Pact and the ban on bailouts, member states are now caught in a joint liability community. But if theoretically all are equally responsible for everything, then in actuality no one is liable for anything, resulting in only “soft“ budget restrictions of economic and political actors. The incentives for voters, politicians, banks, and collective agreement partners to economically kick over the traces are large. What’s more, voters and politicians in the EMU are tempted to operate at the expense of others and there are strong incentives for banks to privatize profits and hold states hostage for losses. Social partners are also susceptible to the appeal of passing off employment burdens to third parties.
„The Lingering Crisis in the European Monetary Union
Organized irresponsibility is destabilizing the Euro “ weiterlesen
It is not constant struggle that is the sign of healthy competition, but diversity. (Michael Rothschild)
The European Union is in bad shape, both economically and politically. For a while now, economic growth has trickled to a halt not only in central states, but in peripheral countries, as well. Member states are moving further apart in terms of prosperity and it seems even the slightest convergence is few and far between. The unemployment rate is hitting record highs and it is predominantly young people who are being affected; younger generations in Southern Europe are more or less losing the prospect of a secure future. The middle class is shrinking and poverty is growing. This, of course, is not only true for crisis states. Indeed, the collapsing euro is a sword of Damocles that hangs over all, threatening every member state with an economic and political meltdown. It’s no wonder that public approval of an increased Europe is shrinking, while the name Brussels has become nightmare-inducing for some. National, regional and local issues have begun to dominate again while Europe’s relevance is being called into question more often.
„The Future of the European Union: Competition or Centralization?
Europe has gone too far“ weiterlesen