Via translation from El Pais, please consider IMF suggests common unemployment benefits for the eurozone.
The IMF proposes more discipline, more fiscal integration, and the creation of a common unemployment benefit and risk sharing scheme to help the club of countries that have experienced damage in this crisis currency.
Fund staff argues that ommon fiscal governance, along with the banking union, are necessary to offset the "weaknesses in the architecture" of the eurozone, reinforce the club of 17 to future crises. In addition, the study argues that the most urgent step to acquire banking union goes through a firewall overall tax.
The pillars of a fiscal union , according to IMF staff, go through a series of mechanisms to pool the risks and avoid further costly bailouts, always subject to greater fiscal discipline. The tighter control over public finances of each country, which occur revenues and expenditures, is the condition of these forward-looking statements, both from the point of view of the IMF and Brussels.
Obedience and monitoring standards would allow the creation of a liquidity fund for troubled countries including a common unemployment benefit or "rainy day fund".
This fund would be nurtured with an amount equivalent to between 1.5% and 2% of the GDP of member countries, which is in line for a fund with Germany for its most troubled regions.
Harmonisation of Employment
But there is much work ahead for something like a common shutdown could crystallize into a eurozone labor markets as diverse. "A common insurance scheme would require a minimum of harmonization in taxation of employment plus pension rights, which would be a positive step towards a single labor market," the report warns.
The fiscal integration also requires a kind of Eurobonds or form of joint financing, led by the center of power and backed by global revenue, which would be possible once common tax structure is already underway.
A single monitoring mechanism should complement a firm commitment to establish a strong firewall " to anchor confidence in the banking system. " And this will require common money too: "While some insurance against banking fiascos be funded by the industry itself, a common fund for recapitalization, liquidation and deposit guarantee would reduce the risk of infection."
The True Vision - A United State of Europe
That is the most comprehensive vision for the United States of Europe we have seen yet. And I propose an immediate up-or-down vote, right now, in all of the 17 member countries.
I am quite sure the unemployed in Greece, Spain, Portugal, and Italy will be 100% in favor of a common unemployment scheme, especially if Germany would foot the bill. And France would always vote for more taxes as a matter of course, the bigger the tax hikes the better.
Common work rules would have to be along the lines of the French work rules of course. And who could possibly be against common pension schemes at the expense of Germany and the Northern European countries?
The more I think about this the more perfect the proposal is. It is complete with every nuance the nannycrats want. So let's not delay. We need an up-or-down vote right now, not by the governments of each country, but rather by the citizens of each county who can decide if they like all of the proposed benefits and taxes necessary to make the United States of Europe work.
Mike "Mish" Shedlock