The way I make A Coherent Argument is

First posted 2012-05-27

I’m voting no, how about you?

If you’ve stumbled on this page looking for advice on how to write a good argument you’ve landed in the wrong place. Try this page instead.

Um. Yes. Rereading The way I make EU Fiscal Treaty is, as I wondering how to improve the layout of this website suggestions welcome) I realized just how rambling and incoherent that particular ramble is. It’s funny because in the past I’ve joked about how the No campaigners in any EU related referendum must be secretly employed by the Commission as their arguments are usually so over-the-top (remember the “99% of Europe would vote No” posters in the last one?) that you just think “well, they can’t be right”. Although I must admit the No side seems a lot more sensible and logical this time – but obviously I don’t include myself in that description. Well, I’m sorry to say that no one is paying me to write this (if any pro Fiscal Treaty folk would like to financially reward my efforts please click here) but still somehow I managed to completely fail to give any coherent reason why I believe this treaty will lead to fiscal union, what I think fiscal union means and why I believe it will be a disaster.

So here goes…

What do I mean by fiscal union?

The ECB already sets the interest rate for the euro but the tax policies of individual member states, which are currently set by member states themselves, also has a clear effect on that state’s economy. By fiscal union I mean a coordinated tax policy – particularly in the eurozone. By coordinated tax policy I do not mean that all member states will be forced to levy uniform taxes. That could happen but it is hard to see how the governments of states who would suffer a loss of competitive advantage as result, like dear old Ireland, could possibly agree to this. What I mean is that the Commission, in agreement with the heads of government of the participating member states, will define the economic goals for the eurozone. Meaning that rather than uniform taxes applied across the states there will instead be acceptable ranges within which states can set their taxes. And I’m sure there will be some very snazzy formulas in order to help countries determine what taxes they can set that will enable them to retain some competitive advantage while still helping business right across the union.

Why do I believe this treaty will lead to a co-ordinated tax policy?

Well how else do you interpret Article 9 of Title IV?

Building upon the economic policy coordination as defined in the Treaty on the Functioning of the European Union, the Contracting Parties undertake to work jointly towards an economic policy fostering the smooth functioning of the Economic and Monetary Union and economic growth through enhanced convergence and competitiveness. To that end, the Contracting Parties shall take the necessary actions and measures in all the domains which are essential to the good functioning of the euro area in pursuit of the objectives of fostering competitiveness, promoting employment, contributing further to the sustainability of public finances and reinforcing financial stability.

Why do I believe that this will be a disaster?

Simply this – we are not there yet. For pity’s sake we haven’t even managed to get monetary union up and going fully. More than one-third of member states are outside the eurozone. The governments within the eurozone are trying to cope with their first serious recession without having the usual recourse to monetary policy adjustments – and let’s be honest here we’re generally not coping well. A coordinated economic policy would further tie the hands of national finance ministers. Individual member states would feel like as if they were mere départments of the EU with each one feeling that the other is getting the better side of the deal. Look at how the media is reporting Eurozone financial matters; Germany is being made to sound like an angry headmaster, Greece the rebel without enough money for his motorbike, and Ireland … actually I don’t even want to think how we are portrayed. I’m exaggerating yes but the point is the EU has never bothered to make sure the EU citizens are comfortable being part of the union. There is freedom of movement for people which has meant that there has been well a lot of movement of people but there hasn’t been any real initiative to enhance cultural union. It’s worth pointing out that in a worrying number of EU countries extreme nationalist parties have made significant electoral gains. We will ignore this trend at our peril.

I said before that I am in favour of the euro and I meant it. I also said I would like the UK to join the euro and I would, in fact I would like all the EU member states to be part of the euro. I’m obviously not suggesting forcing any member states into anything. What I mean is let’s make the euro a success. And I can hear you shout “but that’s what we’re trying to do!” but instead of looking at numbers look at the people behind them. Instead of trying to reassure the markets (by the way the only thing that will reassure the markets is when you show clear vision rather than simply taking a series of reactionary measures) try reassuring the electorate that you are listening to them – you might be surprised by what a positive effect this would have on economies.

Well, I may not have convinced you but hopefully I got my point across this time.