There are many things still unstable in this EU project : The most worrying one the economy and monetary union without fiscal union.
With the Euro barely surviving the financial storm of 2008 And high rates of unemployment and social stress in several EU countries (like Ireland, Greece, Italy, Portugal. Spain , Cyprus, Rumania , etc etc) time has come to think new strategies and long term projects.
We are all under the same military (NATO) and political (EU) umbrella but the intrinsic power of states and prejudice preclude fiscal union or harmonization.
Jacques Delors Foundation advocating for a 2-speeds EU dies not help : excluding UK again? and Scandinavia? Not a good idea . The forthcoming elections to the EP are likely to give satisfaction only to euro skeptics and abstentionist forces.
At PLSD we think different; For us the solution is not the separation of Nordic and UK from the continent -which would please many like Farage and UKIP - but on the contrary work in the opposite direction by giving these countries more protagonism . For example asking the UK to propose and develop a EU Treasury equivalent , managed from London.
Ideally the dynamic balance Berlin (EU central bank) and London (EU Treasury) could be the powerful tandem of economic forces we need to give any future to this amazing political and democratic project .
The design of the Euro was clearly not perfect ; by UK self exclusion (PM Thatcher) the financial capital of London was not part of it.
A 2 speed EU would be cause of further instability .
As Spanish liberals (PLSD) we have a daring and more audacious proposal : let us build a 2pillars EU!
Let us learn from USA: their economic policies have 2 pillars : Treasury and Federal Reserve
The U.S. government has a vested interest in the health and welfare of the country’s economy. Why should EU not try the same or similar?
In the USA the Department of the Treasury works hand in hand with the Federal Reserve to maintain economic stability. The Department of the Treasury, established in 1789, is the older institution.
While the Department of the Treasury is perhaps best known for its role in collecting taxes and managing government revenue, its official mission is to “serve the American people and strengthen national security by managing the U.S. government’s finances effectively, promoting economic growth and stability and ensuring the safety, soundness and security of the U.S. and international financial systems.”
To accomplish its mission, the Department provides economic advice to the president and works with other federal institutions to “encourage global economic growth, raise standards of living and to the extent possible, predict and prevent economic crises.” The Department of the Treasury is also responsible for printing currency in the USA. Even if Nixon abolished the US$\gold standards , other parts if 1944 Bretton Woods agreements remain valid today.
The Federal Reserve System was established in 1913. It serves as the central bank of the U.S. , with a mandate to “keep our money valuable and our financial system healthy.” Its primary method of accomplishing this task is through its influence on monetary policy. (To learn more, read Formulating Monetary Policy.)
This effort involves ensuring that lenders and borrowers have access to money and credit. It also involves balancing the access to money through adjustments to the discount rate and federal funds rate in order to keep inflation in check.
Working Together: as Europeans we feel only admiration and positive envy when we see the USA heads of Treasury and of the Federal Reserve appearing together ( to the right and to the left) of the Anerican President. We marvel when they both stand in front if US Congress or Senate to defend the most powerful economy if the world and the mightier democracy. They WORK
Managing Government Funds
The Department of the Treasury and Federal Reserve work together in an effort to maintain a stable economy. The Federal Reserve serves as the government’s banker, processing transactions, such as accepting electronic payments for Social Security taxes, issuing payroll checks to government employees and clearing checks for tax payments and other government receivables.
The Federal Reserve and the Department of the Treasury also work together to borrow money when the government needs to raise cash. The Federal Reserve issues U.S. Treasury securities and conducts Treasury securities auctions, selling these securities on behalf of the Department of the Treasury. Examples of Treasury securities include:
- Treasury bonds
- Treasury bills
- Treasury notes
- Treasury inflation-protected securities (TIPS)
- The Federal Reserve and the Department of the Treasury are also linked in another way.
The Federal Reserve is a nonprofit company. After their expenses are paid, any remaining profits are paid to the Department of the Treasury.
The Department of the Treasury then uses that money to fund government spending. It’s a relationship that produces a considerable amount of money.
Why cannot us have the same or similar political economic mechanisms and tools in the EU?
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