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The EU is still not a confederation, much less a federation. The Member states are still sovereign, insofar as they have not chosen to pool their sovereignty. Economic management and taxation are still national competencies only curtailed where a Member goes into default or some kind of bail-out programme.

This is the first time the EU has taken on the burden of doing some of the heavy lifting, other than the standard regional, agricultural, structural and cohesion programmes intended to have a long term equalising effect and which constitute a small part of EU GDP.

The total EU budget, if I recall, is about 2% EU GDP compared to a US Federal budget of 21% - although that does take in Medicare, Medicaid, and unemployment programmes which are still national competencies within the EU. It also includes massive overspending on Military of course, which are also national competencies but much smaller in the EU than in the US, much to the annoyance of Trump and the Neo-cons).

So its baby steps, but at least an initial recognition that the health of each member state is also dependent on the health of the other member states economies. The obvious riposte to Yannis is to say that Greece doesn't have to be a member of either the EU or the EZ, and that membership does not constitute a guarantee by the other member states that they will bail you out, to an unlimited degree, every time you get into trouble.

It is his assumption that there is such an implicit guarantee attached to membership that leads him to take a radically different approach and which led to other member states refusing to deal with him when he was Greek Finance Minister.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jul 26th, 2020 at 09:22:15 AM EST
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