Devoting more and more taxpayers’ money to helping European Union members that broke the rules, notwithstanding the strict conditions that have been imposed, isn’t a step in the direction of European political union, but will tend rather to divide the continent, said Otmar Issing, a former member of the European Central Bank’s executive board.
Writing in the Financial Times, Issing said the idea of selling bonds that all EU members guarantee seems sensible in that it would lower interest rates for highly indebted countries, yet it would lead to higher rates for countries that enjoyed credibility with financial markets in the past.
Lack of fiscal discipline would be rewarded, while fiscal solidity would be punished, and the transfer of taxpayers’ money would take place without the involvement of national parliaments, violating the principle of “no taxation without representation,” Issing said.
In short, the idea that a process of transferring taxpayers’ money that’s neither democratic, nor governed by principles that support fiscal solidity, would be a move in the direction of political union is wholly misleading, he said.
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