Tuesday, January 31, 2012

The farcical foolishness of the fantasy fiscal compact

Are the twenty five national leaders of the EU countries that last evening announced they had agreed the terms of a new treaty establishing a fiscal union really expecting their parliaments and peoples to take them at their word?

Can we really believe that these leaders have seriously decided to put aside their main tool of governance over recent decades, namely deficit spending, and set that prohibition in concrete in their constitutions or equivalent national guiding provisions? Are the economics of Keynes really to be banned across the entirety of the territory temporarily controlled by these transient tinkerers?

Of course not! Take France, one of the prime movers of this farce. Its Upper Legislative Body has already ruled any such law as unconstitutional and will refuse any debate on the topic. President Sarkozy behind in the polls, the day before he gave his assent to this nonsense immediately scrapped a large tax on employers to be financed by a VAT rise only to come into effect months later, thus assuredly increasing the French deficit yet further. His Presidential opponent, well ahead in the polls, after next May has rejected the very concept of the fiscal compact. So why has Merkozy wasted the time of 25 other EU leaders in even further debating this nonsens, as they did yesterday, while the real crisis, as pointed out below, in Greece, Portugal and Hungary worsened by the hour?

EU leaders are now so far from reality and in awe of German wealth that they blindly accept anything Merkel suggests, as she represent their sole prospect of ever gaining re-election!

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