It is often proposed that the European Union adopt a form of fiscal union. Most member states of the EU participate in Economic European Union (EMU), based on the euro currency, but most decisions about taxes and spending remain at the national level. Therefore, although the European Union has a monetary union, it does not have a fiscal union.
This was made on purpose, since giving up sovereignty on certain areas and cooperate with many other countries is one thing, but giving up the power to tax and collectively decide how much the government can spend is another, especially between many countries that have different interests, economic policies and culture.
However, the European crisis changed the views of many European policy makers, who have realized that one of the many reasons the crisis took place was due to the lack of a fiscal union.
In the beginning of the crisis, many politicans addressed on the issue, but little has been done.
Recently, French President Hollande proposed an Eurozone parliament, which would address economic issues and have greater competency on fiscal policies.
"The eurozone is a guarantee, protection, security ... we must move forward," Hollande said. "We need an economic government for the euro zone," he said, using a term favoured for years by backers of greater euro zone integration.
"What we want, along with Germany, is a convergence on fiscal and social policy," he said.
move is a step towards a partial fiscal union between the Eurozone member
states, but it will be hard to be accepted by all states as many are worries
about further integration.
What do you think, does EU/Eurozone need a fiscal union? Is it realistic to move towards that direction?
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