Seeking a unified European fiscal administration for all the wrong reasons

French president Mr. Francois Hollande is a (relatively recent, insofar as I can remember) proponent of a unified European tax system and the mutualization of the sovereign debt of the eurozone countries. France was always the nation that wanted to be exempt from most European rules. From the empty-chair crisis, because they could not get their own concerning farm subsidies, to their failure to keep under the 3-percentage limit for deficit in the early 2000's, they shunned rules when they saw appropriate and had the political clout to persuade the European Commission to avoid any disciplinary action against them.

That's why such a proposal sounds somewhat peculiar, coming from the French, as it does. Remember that France has a huge public sector, many privileges for the public-sector employees, generous retirement schemes and high tax rates. It's only natural that France is facing significant deficits and that its competitiveness is very much diminished. So, instead of reforming and raising his own country's competitiveness, the French president aims to have Germany share the French sovereign debt and limit smaller nations' potential to attract investment and raise their own competitiveness through smaller tax rates. In other words, France is essentially seeking to impose its own, failed model, all over the eurozone.

If the French have their way, Europe will just go down the path as France today. The French public sector will be financed from other nations and, of course, this model will prove unsustainable. It will signify a triumph of a bureaucratic state preserving its privileges at the expense of everyone else, both within the same country, and internationally as well. On the other hand, if the implementation of the Stability Pact were to be put in the hands of an authority which would not be subject to political pressure (as is the European Commission), perhaps some actual limits to government profligacy might be put into effect [imagine something like this with an obligation of all states for balanced budgets!]. Of course, that would be anathema for the French, their current enthusiasm for centralized fiscal control notwithstanding.