Forwarded message: >From [EMAIL PROTECTED] Tue Aug 01 15:03:38 2000 Delivered-To: [EMAIL PROTECTED] Message-ID: <[EMAIL PROTECTED]> Date: Tue, 01 Aug 2000 12:15:00 +0200 From: Sven R Larson <[EMAIL PROTECTED]> Organization: Roskilde University, Dept of Social Sciences X-Mailer: Mozilla 4.51 [en] (WinNT; U) X-Accept-Language: en MIME-Version: 1.0 To: [EMAIL PROTECTED] Subject: Oh, we didn't think about that... Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Precedence: bulk Sender: [EMAIL PROTECTED] X-Status: X-Keywords: X-UID: 1843 This is an abbreviation of an article in the Danish daily newspaper Information today: "Only 18 months after the birth of the EMU, it is clear that the rising costs of pensions over the next few years will bring a number of euro-countries in conflict with the fiscal requirements of the stability pact [in the Maastricht treaty]. This is the conclusion drawn in an article written by Svend E. Hougaard Jensen, director of research at the Danish Ministry of Industrial Affairs and Robert R Dogonowski, chief consultant at Cap Gemini, published at the Center for Economic Policy Research, Copenhagen University. Their article, which presents substantially more hurdles for the the EMU than the Danish government did in its own EMU report of last April, shows that the vast majority of euro countries must either launch substantial cuts in public spending or begin to raise taxes sharply, as a direct result of the increase in the number of retired people. As an example, France needs to cut its public spending by 22% or raise revenues from personal taxes by 64%. Most of the countries will run into these problem already within a decade, according to Mr. Hougaard Jensen." With risk of sounding like an old LP that's stuck in one track: the Maastricht treaty and its fiscal policy requirements is the strongest threat against economic and social stability in Europe since the Third Reich. Time is running out for initiatives to have it abolished. Once the fiscal collapse comes (and my guess it's closer than a decade ahead, e.g. because of an unstable euro) it'll be too late to stave off the extreme right and the neo-nationalism that's dwellingin the political backwoods, waiting patiently for a chance to replace the democratic parties who so tragically heralded an entire continent into chaos. If you don't think this is a serious problem, then just as an example remember what happens every time the French government tries to cut public spending by 2.2%... Keynesian wishes, Sven R Larson Assistant professor of economics Department of Social Sciences, Bldg. 22.2 Roskilde University Pb 260 DK-4000 Roskilde, Denmark Phone: (+45) 4674 2910 -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
