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IMF to Europe: We Demand More Socialism

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The International Monetary Fund (dominated by the US which has the largest voting bloc, by far) has demanded Europe be more socialistic. The New York Times reports: 

The three options laid out by the I.M.F. would have different operations, but they share an important feature: They involve other European countries giving Greece money without expecting to get it back. These transfers would be additional to the approximately 86 billion euros in new loans contemplated in Monday’s deal.

“Wait a minute,” you might say. “The I.M.F. isn’t calling for a fiscal union; it’s calling for debt relief.” But once a debt relief program becomes big enough, this becomes a distinction without a difference; they’re both about other eurozone countries giving Greece money.

Indeed, one of the debt relief options proposed by the I.M.F. is “explicit annual transfers to the Greek budget,” that is, direct payments from other governments to Greece, which it could use to make its debt payments. This, obviously, is a fiscal union.

The article mentions only a "fiscal union" between European states, but a fiscal union is just one tiny baby step from a political union. If tax money is seamlessly spread around Europe with little regard for national distinctions or borders, at some point, we just have to admit we're dealing with just one huge state. And that, of course is that the IMF and European elites want — a huge mega-state that can force bailouts, austerity, and taxpayer largesse anywhere inside its borders. 

If the Greek default experience helps illustrate why decentralization (i.e., separate nation states) no longer works in Europe, then that's all to the good, in their minds, and will only accelerate the drive toward one centralized political authority that can direct fiscal, monetary, and regulatory policy across all of europe without having to deal with pesky local referenda or national opposition.  


Contact Ryan McMaken

Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for the Mises Wire and The Austrian, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado and was a housing economist for the State of Colorado. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

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