The eurozone can’t survive without strong regulation and strong taxes

Posted on

FT.com / Columnists / Wolfgang Munchau - What the eurozone must do if it is to survive.

Wolfgang Muchaus says amongst other things:

[T]he EU should at some point revisit the now almost totally decaffeinated proposals for financial supervision. What started off as a deeply unimpressive set of recommendations by the De Larosi?®re committee ended up further diluted as it proceeded through the EU’s legislative mills. The financial system remains the single biggest threat to the long-term stability of the eurozone economy. Fragmented financial regulation makes no sense in a monetary union and is potentially lethal.

But is that what finance wants? Maybe they don't want a Eurozone?

But it's also fair to note the FT reports today that:

Greece will be told this week to cut public sector wages and improve tax collection under a European Union initiative to prevent its financial troubles from destabilising the eurozone.

Greece has an appalling record in collecting tax going back over many years. The reality that states that fail to collect tax will in due course suffer major crises, and a threat to their democratic well being must be faced. Of course it can be argued that in Greece this is the result of a massive shadow economy, but the failure to tackle it is the culture of neo-liberalism that has promoted the idea that the state is harmful.

The evidence that neo-liberal economics is the cause of the problems we're in grows daily. What we can be sure of is that it offers no solutions at all.