Jose Barroso, head of the EU commission, comes out in favor of an economic and fiscal EU by June

José Barroso President of the European Commission Statement has come out on the wrong side of a stable Europe.  Instead of allowing countries to fail, they are aiming to put in rules that will punish those countries who do not hit fiscal targets with sanctions. 
So, if a country cannot pay it's bills, they get a bigger bill.  If a country is financially irresponsible, rather than letting them receive the consequences of their economic decisions, they are punished even more, but then bailed out if those sanctions do not work. 

We have seen that the Euro concept doesn't work because of the inability to allow government's to default or declare insolvency.  The bailouts for Greece and Ireland, are really a closeted bailout of the big banks of Europe that would soon go belly up if their sovereign assets were to come under serious pressure. 

Having stated our position, Jose Barroso, of the EU, has come out in favor of more rules, which will get the thumb by the PIIGS anyway.  He has called for a new regulatory body to accompany the fiscal disaster they call the EU charter.  He wants it in place by June, so get ready for more top down. 

Get ready for a EU budget which doubles or triples in size as many of the current economic activities get pushed to Brussels.  Sovereign taxation will be the first victim swallowed by Brussels, followed by banking regulations, then a common agricultural subsidizer, then environmental regulations.  Via Europa:

Prime Minister Rutte and I agreed in particular on the need to reform the economic governance in Europe. For more stability, we need more fiscal discipline. That means closer surveillance and, if needed, sanctions against those who don't play by the rules. I am glad that the Netherlands is among the strongest supporters of the Commission’s proposals on the table.

This also means that new and tighter fiscal rules should be adopted rapidly. I hope that by June, as indicated by the European Council, we will have the new proposals adopted. As you know we have put forward some proposals and we are now discussing them with the Council and with the Parliament. In fact, our monetary union needs to be complemented with an economic union.

The “European Semester”, which we kicked off with our Annual Growth Survey two weeks ago, is I believe a major step forward. It acknowledges the interdependence of our economies and brings a strong EU-dimension in the national responses.

A video of the conference


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