Many European nations face a sovereign debt crisis because of excessive spending caused by too much redistribution. The obvious – and only – solution to this crisis is to reverse the policies that caused the problem.
So take a wild guess about what the International Monetary Fund recommended: Did the international bureaucracy recommend that nations such as Greece and Portugal impose serious fiscal discipline, such as the spending freezes that worked so successfully in New Zealand and Canada in the 1990s?
Of course not. That would make sense. Instead, the IMF is urging more centralization and redistribution in order to facilitate “economic governance” and “fiscal transfers.”
I’m not a fan on international bureaucracies, and I wasn’t expecting good advice, but even I’m stunned. Here are some excerpts from a story in the EU Observer.
The International Monetary Fund has bluntly warned the European Union…it must integrate faster and more deeply in order to stop a global disaster. …Saying Europe is at a “crossroads”, the IMF’s acting director, John Lipsky, in Luxembourg for a meeting with EU finance ministers, declared: “The euro area needs to strengthen economic governance and may need to be more intrusive in terms of national structures.” …the IMF said that still “more economic and financial integration” and EU intervention in national economies is necessary. …Specifically, the report mentioned that “without political union” and fiscal transfers, “stronger governance of the euro area is indispensable.”
