National decision-making must improve the efficiency of the euro area
The euro-zone needs to strengthen its institutions and make its national decision-making processes more efficient in order to strengthen the euro, European Central Bank Executive Board Member Lorenzo Bini Smaghi said Tuesday in a guest commentary to German daily Handelsblatt.
"To say it clearly I'm not in favor of a tax union or a transfer union. I'm only warning that the risk of transfers increases through inefficient decisions," Bini Smaghi wrote.
Bini Smaghi once more suggested that the euro-zone should issue debt through a "supranational" agency which would oversee issuance and make sure that agreed-to budget and debt plans are adhered to. Such an agency would serve as a true "debt brake," he said.
However, he ruled out the idea of using so-called "Eurobonds" as a way to pay for the debts of member states in the event that they reach their debt ceiling and are required to make use of the euro-zone bailout mechanism or consolidate fiscally.
"Every state must pay for its fiscal policy itself," Bini Smaghi said.
Given the need for a stronger decision-making process within the euro-zone, Bini Smaghi said that a "currency union is also a political union."
"To say it clearly I'm not in favor of a tax union or a transfer union. I'm only warning that the risk of transfers increases through inefficient decisions," Bini Smaghi wrote.
Bini Smaghi once more suggested that the euro-zone should issue debt through a "supranational" agency which would oversee issuance and make sure that agreed-to budget and debt plans are adhered to. Such an agency would serve as a true "debt brake," he said.
However, he ruled out the idea of using so-called "Eurobonds" as a way to pay for the debts of member states in the event that they reach their debt ceiling and are required to make use of the euro-zone bailout mechanism or consolidate fiscally.
"Every state must pay for its fiscal policy itself," Bini Smaghi said.
Given the need for a stronger decision-making process within the euro-zone, Bini Smaghi said that a "currency union is also a political union."