Euro Zone Reform: EU power play misses goal

Handelsblatt Global: European Commission President Jean-Claude Juncker presented his ambitious reform agenda despite German efforts to postpone it. That won’t help his cause.

The European Commission unveiled its ambitious program for euro zone reform on Wednesday ... The proposals include having the renamed EMF participate in a “stabilization function” to make preemptive loans to a member country to help ward off a brewing crisis. But economists from the Center for European Policy Studies, a neoliberal think tank in Germany, urged against it, warning that such a facility would lead to a lack of discipline. “The stabilization function harbors the risk that liability and control no longer go together,” CEPS economists Matthias Kullas and Bert Van Roosebeke said in a statement. “Financial transfers for member states that are hit by a financial shock reduces the individual responsibility to get ahead of the shock or to ensure its resolution.” on