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A European Ministry of Finance? A European Ministry of Finance?
by Christos Mouzeviris
2013-04-14 09:13:10
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The ongoing economic crisis in Europe and its currency creates an unprecedented need to find solutions. Yet somehow the way our leaders are dealing with it, has only caused a great divide among the European nations. There has been widespread criticism about the decisions our leaders took and the recent developments in Cyprus are just one example. 

  “I cannot remember that European policy makers have seen anything coming throughout the euro crisis,” said Paul de Grauwe, a professor at the London School of Economics and a former adviser at the European Commission. “The general rule is that they do not see problems coming.” (http://www.nytimes.com/2013/03/27/world/europe/europeans-planted-seeds-of-crisis-in-cyprus.html?pagewanted=all&_r=0)

If that is true, then how can we trust our leaders to come up with a plan that actually works? Our future is in their hands and they are seen to constantly disagree, bicker with each other while playing dangerous power games. The German leadership is pulling its weight in the euro club and we see Mrs Merkel and her finance minister Mr Schauble, expressing their opinions on what other states must do. As if they were elected by every European to lead them, so they think that they can speak for us all.

If anything else this crisis just exposed all weaknesses of the European elites and the real "state of the Union!" It is clear now that the only solution to save the euro and Europe's economy, would be something that our governments are trying so desperately to avoid. More "European" governance and a harmonized European economy. 

This is not a new idea. In 2008 and the beginning of the crisis French President Nicolas Sarkozy, called the Eurogroup to be replaced by a "clearly identified economic government" for the euro-zone. Stating it was not possible for the euro-zone to continue without it. The euro-zone economic government would discuss issues with the European Central Bank, which would remain independent.

This government would come in the form of a regular meeting of the euro-zone heads of state and government, similar to the European Council. Rather than simply the finance ministers which happens with the current Eurogroup. He said that "only heads of state and government have the necessary democratic legitimacy" for the role. This idea was based on the meeting of euro-zone leaders in 2008 who met to agree a coordinated euro-zone response to the banking crisis.

This is in contrast to an early proposal from former Belgian Prime Minister Guy Verhofstadt who saw the European Commission taking a leading role in a new economic government, something that would be opposed by the less integrationist states. Sarkozy's proposal was opposed by Eurogroup chair Jean-Claude Juncker, who did not think Europe was ripe for such a large step at the time and opposition from Germany killed off the proposal. 

Mrs Merkel approved of the idea of an economic government, but for the whole of the EU, not just the euro-zone as doing so could split the EU and relegate non euro-zone states to second class members. (http://en.wikipedia.org/wiki/Euro_Group)

I agree with Mr. Verhofstadt's and Mr. Sarkozy's proposal, but I disagree that the control of the euro-zone governance should be given to the hands of the EU Commission. In my opinion we need an EU or euro-zone ministry of finance. The Commission is not elected by the citizens and should not have so much power, it is not accountable to us. If this new body will have to answer to any EU body, that should be the European Parliament. 

We should have a legitimate and elected by the people head of this new "ministerial" position, so that it would be answerable to them. Right now we give way too much power and importance to the banks and look where they got us. Do I want a strong powerful European Central Bank with no control by the European Parliament, or at least some accountable elected politician? No. 

It was that absolute freedom of all the Central Banks across Europe that lead us to this crisis. In Ireland, many scandals came out of the corruption and tragic mistakes that the officers of the Irish Central Bank made. They were simply not doing the job they were appointed to do, they were not regulating the banking system. And in many cases they were turning a blind eye to what was happening in the country. 

I agree that we need to keep the euro but only if the euro-zone becomes more transparent and democratic. Why have a super powerful ECB that will answer to no elected accountable politician? A European "Ministry" of finance would be a solution, thus further unification. Otherwise let's forget the whole thing as it does not work, for the people at least. We have set up the euro while having no single government or economy in Europe.

There are of course already two  bodies that are helping Europe manage its finances. The so called Eurogroup and the Ecofin. Prior to the Lisbon Treaty, the Eurogroup had no legal basis. This had some advantages as, because it was not a Council formation, it is smaller and more informal resulting in more constructive and confidential discussions than the full Ecofin Council. It also means that it does not have the usual rotating six-month presidency meaning its work is streamlined and strengthened when compared to the other institutions. (http://en.wikipedia.org/wiki/Euro_Group)

The Eurogroup sounds like a good potential basis for the formation of this new "ministry." Unlike the Ecofin that meets once a month and its presidency is rotating every six months, the Eurogroup has a permanent president. The only trouble with both groups is that they are comprised by ministers of our governments. So inevitably there will be a certain amount of antagonism among the ministers. Is this perhaps the true reason that the Eurogroup came under so much criticism over its handling of the Cyprus financial crisis?

We will have to create a body that is independent from our national governments and answerable to the European Parliament. The Ecofin group is a part of the European Union Council, thus is controlled by them. If Europe has managed to agree on a permanent representative of a Common Foreign and Security Policy (CSFP), then why not do it for its economy that is in tatters for almost 4 years?

A few years back Europe was not ready for such move, as Mr. Juncker stated. But the crisis seems to be worsening and engulfing one by one all EU states. We feel that our national governments are more trustworthy to deal with it and we are becoming more and more skeptical of the EU institutions.

But if we really have a closer look, it was actually our national governments and politicians that did and keep doing the worse damage to our economies. We should not have any country and its government or minister of finance, notably Germany, dominating European politics.

For smaller states a better deal is in hand in the form of a federal formation. Either we all decide the future of our economies together, or we are told what to do by the leadership of one or two powerful European "partners." What do you think is best? 

*************************************************************************

Christos Mouzeviris is the writer of the blog: The Eblana European Democratic Movement


     
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Emanuel Paparella2013-04-14 14:43:06
The answer to the question at the end of the above article depends on whether or not the EU conceives of itself as a federation or confederation united by more than a bank or soccer games on Sunday, but rather by common values and a common historical heritage buttressed by a genuine democracy, as the visionary founding fathers surely envisioned, or as a superpower of united nations a super-nation eager to compete with other mega-nations and offering no alternative, wherein in a Machiavellian mode, the stronger powers rule and make all the important decisions as power would dictate (Napoleon’s dream of a United Europe, or nightmare as the case may be). Which is to say, the center does not hold. The more encompassing nemesis to the vision of the founding fathers is proffered by the Irish poet William Butler Yeats in his poem The Second Coming which discerns things falling apart in Western Civilization; a Europe neglectful of its heritage and history and bound to repeat all the mistakes of the past and re-invent the wheel and think it has made a great discovery.

Perhaps here we ought to seriously reflect upon its first stanza of that poem:

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned.


Emanuel Paparella2013-04-15 00:03:53
P>S> An oversight: in transposing the first stanza of The Second Coming I left out its two last lines which are the most relevant to the current situation of the EU:

The best lack all conviction, while the worst
Are full of passionate intensity.

That made me think of the Neo-Nazis in Greece as described by Thanos recently.


Leah Sellers2013-04-15 03:49:08
Dear Christos,
Sir, in many ways what is going on within the European Fianancial System is reflected within the overall Global Financial System.
These are all the aches and pains due to many Corrupt and Avaricious Global Leaders, Global Banks and Global Corporations, and the Push-pull Energies involved with the Creation of a Global Financial System.
When a Federation of States like the United States of America, and the European countruies who joined the EU Economy, begins to feel real and serious Financial and Social stressors comparable to Geophysical tectonic plate shifts creating earthquakes, tsnamis, hurricanes...etc./Great Depressions and Recessions and Revolutions, the Fianacial and Socio/Political landscapes will rock 'n roll, and at times appear to be (or actually be)torn asunder.
Until the World Leaders, Bankers, Corporate Moguls, and Wall Streeters begin to make Decisions and Financial Algorithims which Benefit the Many instead of the Few. We are all in for a rather bumpy ride, Sir.
Because everything being proposed now is just short term bandaging for some, and outright Heel of the Boot Tyranny and punishing Austerity for others. There are no good Choices here, Sir. Just better disguised "more of the same". Also, the longer time goes by, and the more worn down everyone feels by the stressors involved, the more willingness you'll find to accept any bones thrown your way. And Sir, these are very Old Bones, lacking completely in nutrition, and which will leave you nothing but splinters in your stomach and intestines for you to slowly hemorrhage upon.


Christos Mouzeviris2013-04-15 11:02:43
Sad but true Leah and Mr Paparella..


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