As investors prepare for another trading week, stocks are in risk mode on expectations that euro zone policy makers will do whatever it takes to preserve the euro.
The problem according to Otmar Issing, a former European Central Bank (ECB) board member from Germany, is that the solutions being put forward to solve the crisis will violate the fundamental democratic principles of no taxation without representation.
“Political union is impossible to achieve within a few years. It cannot be a means of crisis management,” Issing wrote in Monday’s Financial Times.
“Promising later action against requests for more money now does not look like a credible strategy—quite the opposite. This approach would severely undermine the idea of establishing political union ,” Issing said.
Following reports that the ECB and the euro zone’s rescue funds will this week sign off on a plan to buy up peripheral sovereign debt, Issing warned such a move threatens long-held democratic principles.
“The implicit transfer of taxpayers’ money would be a violation of the fundamental democratic principle of no taxation without representation. This is true for all forms of debt mutualization. This is hardly the proper way to create a democratic European Union” said Issing.Page 1 of 3 | Next Page