[donquixote99]

Originally Posted by catswiththum

Read these two:

http://www.spiegel.de/international/...a-1022629.html

http://ec.europa.eu/taxation_customs...s/index_en.htm

The first is quite interesting. Cogent criticisms of European structure and policy occupy the first part of the interview. But criticism is of course easy, while practical solutions take a lot more work. So I am most interested when Piketty gets more prescriptive, in the later part of the interview. Here's an extended quote:

Piketty: We need to invest more money in training our young people, and in innovation and research. That should be the most important goal of an initiative to promote European growth....

We need a fiscal union and a harmonization of budgets. We need a common debt repayment fund for the euro zone, like the one proposed by the German Council of Economic Experts, for example. Each country would remain responsible for repaying its portion of the total debt. In other words, the Germans would not have to pay off the Italians' old debts, and vice-versa. But there would be a common interest rate for euro bonds, which would be used to refinance the debt.

SPIEGEL: But that would create the risk of a big debt coalition. Who determines how much debt is allowed?

Piketty: We need a communitization of debts, but it has to be democratically legitimized. I propose a European parliament for the euro zone that would consist of members of the national parliaments. Each country would be represented in this parliament in proportion to its population size. In other words, Germany, with its 80 million inhabitants, would have the largest number of members. These politicians would then vote democratically on how high the deficit could be in the euro zone.

SPIEGEL: And the Germany lawmakers, with their aversion for large deficits, would be routinely outvoted by their more free-spending colleagues.

Piketty: I do, in fact, assume that this type of parliament would have saved less in recent years, and would have instead spent more on growth and fighting unemployment. It would have been good for us all. Germans shouldn't be afraid of democracy. If we have a common currency, at some point we have to accept that we also spend money together.

SPIEGEL: How do you intend to ensure that a country like Greece doesn't just return to living beyond its means?

Piketty: Greece would be subject to greater fiscal discipline. The amount of debt would be fixed by a European parliament in which Greek members would only play a subordinate role. In the long run, we need a fiscal union in Europe that is democratically legitimized.

...

SPIEGEL: How could Hollande and Merkel inspire voters to support more Europe?

Piketty: They need to explain to voters, for example, that even Germany and France can no longer manage to efficiently tax multinational companies, because the companies are playing countries off against each other. To this day, many major corporations from the United States and Europe pay less in taxes than small European companies. A common corporate tax for the euro zone, which would be determined by the new euro-zone parliament, would be helpful and would certainly be popular among voters.

SPIEGEL: At this point, voters don't seem overly keen to shift more power to Brussels. On the contrary, EU-skeptic parties are becoming popular everywhere.

Piketty: No matter what you think of Syriza's election victory, it could serve as a shock therapy of sorts for those in power. Suddenly they'll realize that what they've been doing isn't working, and that they have to take a different approach. But a leftist party like Syriza or Spain's Podemos isn't nearly as dangerous as the extreme right. The National Front here in France is more popular than ever at the moment. That's why it's so dangerous for the established parties to continue fueling these nationalists. Constantly berating the lazy Greeks or Portuguese is irresponsible.

Piketty in short is for a new and strong trans-national government in Europe, and see neo-fascist reaction as the greatest danger in the current crisis. I broadly agree, though I certainly see no quick or likely route to implementing such a new power structure.