Monday, May 30, 2011

If Germany is (really) tired of being the largest contributor to the EU then ...

If Germany (*) is (really) tired of being the largest contributor to the EU budget etc (some refer to Germany as "paymaster" (yikes, very PC, not)), then it should press hard ASAP for EU political union, which of course will include a federal US type income tax.

Then member states would not be contributing to the EU federal budget, but the taxes paid by the high income earning - high wealth persons/households around the Eurozone/Europlus/EU as well as the high profit making companies around the Eurozone/Europlus/EU. Collected by an IRS-type federal tax authority.

Will come back to this issue in more detail in future post(s).

(*) The same applies to other "aid" tired members of the EU "North", see the interview of the European Economic & Monetary Affairs Commissioner Olli Rehn 'There Is a Certain Aid Fatigue in Northern Europe' in Spiegel Online International, today (05/30/2011).

(What about a certain exhaustion of the firms, especially exporters and tourism, of the PIIGS and other Eurozone members, due to the long periods of uber hard Euro (vis-a-vis the USD as well as the currencies of Denmark, Sweden and all other non-Eurozone EU members as well of course China et al) since 2002?)


  1. Germans pay an income tax of up to 5.5% called the Solidarit├Ątszuschlag - a "solidarity" tax with East Germany to fund reunification. Germans are coming to see the bailouts to the EuroZone periphery as another solidarity tax. While payment to right the wrongs of the Berlin Wall and a divided Germany has been tolerated (just!) there is no enthusiasm for similar charges (for decades) to cover the needs of the EU periphery. Sooner or later German politicians will reflect the views of he German people.

    The rumoured second ECB bailout of Greece will (assuming it happens) alienate Germans both from their government and the Euro. Many Germans would look favourably on a German exit from the euro - probably this is now the most likely outcome.

  2. Dear Graeme
    The topic of my post is the rationale for a federal income tax in a politically united EU, not the issue you address in your comments!


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