EU fiscal harmonisation – why not? Look at C & E Europe

Many doubt that EU member countries would accept fiscal harmonisation, which implies ceding some sovereignty. If you look at the profound changes the ex-Communist countries of Central & Eastern Europe accepted to qualify for EU membership however, this does not seem impossible.

Those countries introduced market economies, democratic rights, the rule of law and safeguards for minorities in order to conform with EU requirements. This was all contrary to their previous practices, and required an enormous upheaval. It hurt, since the change to a market economy caused deep recession and unemployment for a number of years. They did it because membership of the EU is such a powerful draw in the long term. The people voted in referenda in favour of all the EU norms, including joining the euro and Schengen.

Now Greece, and possibly other countries, may be asked to allow the European community in some form or another to supervise its budgets. This would be only to the good, since local politicians have been unable to do what is needed. As in Central & Eastern Europe, Greeks may well recognise it is better for a time to have the EU calling the economic shots rather than their local politicians.

Already in Italy, Mario Monti, a former EU commissioner, is proving popular in an econ0mic reorganisation which the party politicians could not achieve. Sometime, it is easier to accept a tough lesson from an outsider.

As for Greece, European bureaucrats grew used to seeing it flaunt EU norms. They considered it too small to count. They won’t make that mistake again.

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