The head of the International Monetary Fund (IMF) has claimed that a central fiscal authority for the euro zone could give far greater tax and spending control to member states.
Dominique Strauss-Kahn, who ranks highly in France's Socialist opposition, told the Brussels conference that, "a more integrated and centralised fiscal framework could deliver higher and more stable growth for Europe."
His claim came with a warning that, without what he called "fiscal federaliss", the European single currency may not survive.
He called for the European Commission to be given greater powers to police the national economic policies of member nations. Either that or set up a separate, independent institution similar in design to the European Central Bank (ECB).
In calling for a larger, EU-level budget, Mr Strauss-Kahn cited the federal systems in the USA and Canada. These systems mean that when a particular state suffers an economic shock, the federal budget can direct specific resources to the affected state and make the adjustment easier. The financing of this budget, he said, could come from a a "European VAT, or by carbon taxation and pricing."
Mr Strauss-Kahn was France’s finance minister from 1997-1999 and unsuccessfully sought the French Socialist Party’s candidature for the presidency at the 2007 election, held in 2007, and is widely expected to seek it again.
RSS
