EUOBSERVER / BRUSSELS - Public debt in eurozone countries should be monitored more strictly, as high-debt states may undermine the stability of the whole monetary union, Dutch finance minister Wouter Bos has said, in remarks echoing earlier warnings that future expenditure arising from aging populations could pose a risk to the survival of the euro. Speaking at the Brussels Economic Forum on Thursday (15 May), Mr Bos argued that policymakers in the single currency area should "put the focus on sustainable debt positions on an equal footing with the existing focus on annual budgetary results." He warned that with a greater burden on public budgets due to rising pensions and healthcare costs, coupled with a diminishing working-age population, "three-percent annual deficits are really no longer permissible and in many cases even balanced budgets may be inadequate." "Large debts have to be purged and sustainability guaranteed," he stressed, adding that otherwise the euro area may suffer, as "doubts about sustainability will push up the cost of capital" in the monetary union.
"Large debts have to be purged and sustainability guaranteed," he stressed, adding that otherwise the euro area may suffer, as "doubts about sustainability will push up the cost of capital" in the monetary union.
Or the euro area could opt for more aggressive progressive taxation, with much higher taxes on speculation.
Anyone who says 'But that will slow down the economy' needs to be asked how much slower it can get when the current system almost crashed, and was only bailed out with government support.
