Some of the closest advisers to German Chancellor Angela Merkel – who is desperate top avoid hitting up her taxpayers again to prop up the euro – have found a solution: soak the European rich outside Germany (Ambrose Evans-Pritchard, Telegraph):
Senior advisers to Chancellor Angela Merkel are pushing for better-off households to pay towards the cost of any future bail-outs for the weaker members of the single currency.
The proposals, from members of Germany’s council of economic experts, raise the prospect of taxes being imposed on property in a country like Spain if its government was forced to seek a bail-out.
The council, known as the “Five Wise Men”, is often used to test new policies that are later adopted officially.
The German suggestion is the latest sign that Berlin is intent on imposing even tougher rules on weaker southern euro members in exchange for using its economic might to support their finances.
. . .
Senior figures in Germany are now arguing that some richer home owners in countries like Spain, Portugal and Greece have so far avoided paying their fair share to rescue the euro, leaving Germany paying too much.
Taxes on property or other assets would mark a significant change in Europe’s approach to funding bail-outs for eurozone members. Until now, the cost of rescue packages for countries like Ireland, Greece and Portugal has fallen largely on people who invest money in either those countries’ bonds or – in the case of Cyprus – bank accounts.
Anyone who’s stuck “underwater” or is “land rich and cash poor” can only marvel at the breathtaking arrogance of the “Wise Men.” The editors of the Telegraph explain how backwards thinking has led to this:
Their starting point is “What is necessary to save the euro?” From there, they end up advocating policies of quite startling brutality. Yet the very differences in housing wealth between nations illustrate, once again, the folly of locking disparate economies into a shared currency. Those in Brussels and Berlin must ask instead: “What is necessary to restore prosperity to our benighted continent?” The answer is to recognise (UK sp) that the euro, in its current form, is bringing ruin to all too many of the nations trapped inside it.
The simple fact is that German exporters are calling the political tune. The euro has been weaker than the old Deutschmark, which has been good for those exporters, but not so good for consumers. The corporatist mindset of the German elite ensures that the exporters get their way. Thus, they start with “What is necessary to save the euro?”
As it happens, the German people can at last have their voice heard on this with the rise of Alternative for Germany – the first Euroskeptic party Germany has seen since long before the common currency was inflicted upon them.
Cross-posted to the right-wing liberal