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imagine that the ECB charged interest to the national central banks on their net balances, both positive and negative, and then transferred the proceeds to the "EU finance minister" for funding of an industrial policy component of the structural funds.

That's a cross-subsidy. Mind you, a cross subsidy in which activities we don't like are going to pay for activities we do like. But still a cross subsidy, which means that if you're doing it right it's a funding source that will shrink over time.

So that implies that the European federal budget will be tasked with no expensive policy aside from killing trade imbalances.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 2nd, 2011 at 03:02:08 PM EST
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