Breaking a Taboo: Plans for Euro-Zone Tax Take Shape

http://www.spiegel.de/international/europe/plans-for-euro-zone-tax-take-shape-in-berlin-and-paris-a-1045868.html



After the Greek bailout disaster, Paris, Berlin and Brussels want to reform the euro zone by creating an economic government and a special tax for the currency area. German Finance Minister Schäuble is in favor, but Chancellor Merkel is skeptical.

Breaking a Taboo: Plans for Euro-Zone Tax Take Shape
By Michael Sauga, Christian Reiermann and Christoph Schult
July 30, 2015 – 04:47 PM

History has shown that when a government wants to solidify its power, it has to turn its subjects into taxpayers. The Roman Empire demanded high tribute payments from every tribe it had newly conquered. And the United States developed from a commonwealth to a federal state when, in the 18th century, Treasury Secretary Alexander Hamilton achieved uniform duties and taxes for the entire union, initially on whisky, because it was so lucrative.

Politicians in the euro zone are now seeking to emulate the historic model from the early years of the United States. The unnerving bargaining over the latest Greece bailout program has led the leaders of the monetary union to conclude that the euro zone has to become more tightly joined together politically.

European Central Bank (ECB) President Mario Draghi wants stricter rules for the banking union. French President François Hollande is calling for a separate economic government for the monetary union. And in Brussels and Berlin alike, financial experts are devising plans to provide the Euro Group with the same tool that has proven to be so successful throughout history: its own tax.

If the plans were implemented, it would constitute the breaking of a taboo for the Continent. The people are used to the fact that some powers are shifted to Brussels as part of European unification. But there is one thing even the most devoted proponents of Europe had shied away from until now: giving the EU the right to impose taxes, a power many felt the member states should retain. It had long been a given that this was something the European people would never accept.