Headline: Europe Warned It Faces Taxation Without Representation
As investors prepare for another trading week, stocks are in risk mode on expectations that euro zone policy makers will do whatever it takes to preserve the euro.Source: finance.yahoo.com
The problem according to Otmar Issing, a former European Central Bank (ECB) board member from Germany, is that the solutions being put forward to solve the crisis will violate the fundamental democratic principles of no taxation without representation.
"Political union is impossible to achieve within a few years. It cannot be a means of crisis management" Issing wrote in Monday's Financial Times.
"Promising later action against requests for more money now does not look like a credible strategy-quite the opposite. This approach would severely undermine the idea of establishing political union," Issing said.
Following reports that the ECB and the euro zone's rescue funds will this week sign off on a plan to buy up peripheral sovereign debt Issing warns such a move threatens long held democratic principles.
"The implicit transfer of taxpayers' money would be a violation of the fundamental democratic principle of no taxation without representation. This is true for all forms of debt mutualization. This is hardly the proper way to create a democratic European Union" said Issing.
Another idea being floated to help restore confidence in the euro zone is the formation of a banking union, but Issing warns such a move risks undermining European unity.
-------------------------------------
Insights is intended to reflect excellence in effort and content. Donations will help maintain this goal and defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations.Thank you for your contribution
