FRANKFURT (MNI) – Harmonized and centralized economic policy within
the European Union, or “economic governance,” is “not a sensible
option,” German Economics Minister Rainer Bruederle said in an essay
published Thursday.
Bruederle, in an essay for Germany’s Ifo economic research
institute, also joined a chorus of voices calling for the strengthening
of budgetary discipline within the bloc.
“For this, sanctions must take effect earlier and in a more
effective manner than is currently the case and they must really be
applied,” he wrote.
Both financial and non-financial sanctions, such as the removal of
voting rights, should be possible “if the rules of the game within the
currency union are grossly violated,” he said.
The concept of “economic governance” has been a source of conflict
in recent months between France and Germany, two traditional pillars of
European Economic and Monetary Union.
While France calls for deeper integration and harmonization of
policy, Germany seeks tougher penalties for “budget sinners” —
countries that break the Union’s rules on deficits and debt.
Indeed, “there is no reason for a far-reaching centralization of
economic policy” within the EU, Bruederle argued.
“The attempt to find custom-made solutions for every [EU] member
state from a central look-out post would be costly and inefficient
because of the enormous information costs and ultimately problems with
information that could not be overcome,” he concluded.
–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com
[TOPICS: M$G$$$,M$X$$$,MGX$$$]
