Would the Fiscal-Union be a debt-serfdom or a resolve of the Euro-Zone debt crisis for the EU citizen?

Obviously, there are several ways to look upon the EU debt crisis. Two of the major countries France and Germany want to solve the EU debt crisis with a Fiscal Union. Others believe that the EU debt crisis is due to the complex EU structure and the difference in cultural and economic responsibility among the EU members.

No doubt, the EU has a debt crisis, but this crisis is rooted in a lack of popular support, a lack of transparency and democracy and has a high degree of complexity. The complexity are not addressed, by the National governments, as they do not have the will or support from the population to focus on what needs to be done to get the EU to become more manageable and understandable. The whole EU Union has become too complex. The reigning countries in EU, is the hardcore fiscal solvers Germany and France.  These countries want to solve the EU debt crisis with a fiscal solution.

A Fiscal Union, have been suggested by France and Germany, mainly to take the heat off these countries, as the controllers of the Euro Zone.

The governing of the Fiscal Union, will be taken care of by IMF and the European Financial Stability Facility (EFSF) this set-up has been created by France and Germany mainly to take the heat off these nations. Germany in particularly has been synonymous by controlling and deciding how the Euro Zone fiscal situation should be governed.

The EFSF is a company that was agreed by the countries that share the euro on May 9^th 2010 and incorporated in Luxembourg under Luxembourgish law on June 7th 2010.

The EFSF´s objective is to preserve financial stability of Europe’s monetary union (Euro Zone) by providing temporary financial assistance to euro area Member States if needed. In order to fulfil its mission: The EFSF are authorised to Issue bonds or other debt instruments on the market to raise the funds needed to provide loans to countries in financial difficulties.

·         intervene in the debt primary market

·         intervene in the debt secondary markets

·         act on the basis of a precautionary programme

·         finance recapitalisations of financial institutions through loans to governments including in non-programme countries

The EFSF is an organization invented for, financed and controlled by the 17 Euro Members. The remaining 10 EU members, are outside the control and “help” of EFSF. These 10 members, has been invited to participate in the new Fiscal Union on the EU summit December 9^th 2011. The purpose to invite the 10 non Euro Zone members into the new Fiscal Union, has among other things been to contribute to the EFSF crisis fond. The 17 Euro members want to have, the 10 countries outside the euro zone to support and get a closer connection to the Euro. 

The question is;

·         What is the incentive to the 10 EU members outside the Euro Zone to participate in the fiscal union?

·         What is the advantage of the 17 Euro members in getting the remaining 10 members to be closer to fiscal cooperation in the union?

Today the 10 EU members outside the Euro Zone have no financial responsibility towards the bad debt of Greece, Portugal and Ireland they are outside the Euro. The 10 EU members outside the Euro Zone have relatively economic growth, relatively good financial conditions even though they are closely, connected to the euro. What should the incentive for these countries be to pay an amount to the crisis fond of the EFSF and participate in the Fiscal Union?

The main argument from the Danish government has been not to loose influence in the EU union and therefore commit to pay 5.3 billion€ to the EFSF crisis fond.

Should that be an argument, that influence should be tied up to securing European member states who have not acted economical responsible?

Is it an economically healthy country's interest to increase the countries debt by bailing out other countries with less control of their fiscal budget?

There is a great risk, that Denmark paying the 5.3 billion€ to the EFSF crisis fond, will end up in a "Fiscal union" which could be seen as a code-phrase for a highly profitable debt-serfdom. Some will describe the Fiscal Union  as  an automatic sanctions “EFSF machine”, to force member countries to have a close control of their fiscal and tax policies, where EU bureaucracy flourishes and the people of the EU are imprisoned in a modern serfdom. This is harsh words, describing the initiative from France and Germany, never the less there seems to some through in the description.

The “musketeers oath” “One for all and all for one” which is the purpose of the EFSF crisis fond is good for the Euro Zone members but not in the best interest of the members outside the Euro Zone. The members outside the EU Zone will be guarantee for the Euro would not collapse without gaining any special advantages.

The only country who saw this and protested against the fiscal union was United Kingdom. They wanted special status for the London financial district, if they should participate in the fiscal union. On the fiscal Union founder side, was France and Germany who needed to have Britain onboard but on the other hand did not want to grant any members special conditions to participate. The European commission tried afterwards to “sell the fiscal union” to Denmark, promising that their EU reservations could continue even though they supported and paid to the fiscal union. The incentive, seem small for the members outside the Euro Zone – it seems that the problems these countries will gain is much bigger than they have today. On the other side, the Euro Zone countries have a lot on stake. These countries are gambling with the EU union at its present state. The Euro Zone members advantages of having the “outsiders” inside a fiscal union, seems bigger than the opposite situation. The Euro zone members, will be financially less burdened by getting 10 EU members outside the Euro Zone to support the euro and the cash-strapped countries in southern Europe will be a major victory for France and Germany.

Luckily, a number of opposition politicians from the "outsiders" have looked into the Fiscal Union and have stated clearly that we must not be in the euro when the foundation of a reasonable and mutually supportive cooperation is not present. The foundation is not in place when the southern European countries do not have a firm grip on their fiscal and tax budgets.

If a Fiscal Union will be an economical serfdom or a solving of the EU debt crisis for the European citizens is difficult to see on a short term, and even harder to measure on a long term. It is up to the 10 Euro Zone outsiders to decide weather it is worth to make the economical  sacrifices for maybe solving the debt crisis in EU, or should they take the stand as United Kingdom, stay outside as long as they do not get some economic concessions from the founders of the Fiscal Union.