Towards a European Super State

[minestrone]

On a per state political level much of Europe's electorate still flirts with far right and far left politics and on recent history Europe has been tending towards what we moved to during the Thatcher and Blair period, free market economics but keeping the old guard on side with a few nice brand logos and the promise to keep in touch with their socialist roots. I see no reason to follow what has been following us.

Britain ain't no dream state but we do not have too many whacky ideas on how to run things based on back of the fag packet ideas and generally we have an electorate who does not care that much to vote for real change.

[AtW]

It should not be possible to have a EU member state with crazy low taxes like Ireland has in relation to others - just like with VAT there should be fixed range of certain taxes to ensure fair competition in Europe.

[doodab]

Non EU, US has a federal system (each state has legislative powers,
Non EU Switzerland is Federal with the cantons. Germany is Federal and the taxation for some of the states is written in the constitution.

Exactly, so why is a federal european state so hard to imagine?

I was a supporter of the EU but in years since; the bankers have taken over the running of it. The EU laws are made to help large corporations but when it comes to small business and contractors there is no freedom or harmonisation or work without hinderance in other EU countries. BTW I have worked in many other EU countries before and after membership so I do have experience of the bureaucracy involved.

I agree to a large extent, but while it's a valid criticism of the status quo, and possibly a reason to fear a european super state, it's not a reason why the latter won't happen. That is really what I am getting at, I hear lots of people saying "it will never happen" when what they mean is "I don't like the idea" and while I am well aware of the many reasons people think it's a bad idea I have yet to hear a convincing argument as to why it is "impossible" as many people seem to think.

Personally I would like to see some harmonization of the legal structures that can be used to trade in all EU countries (e.g. a common "eurocompany", or "eurofreelance" status) with harmonized tax treatment (i.e. tax status, not rates necessarily) and perhaps a harmonised VAT registration system so that one could register once and have a VAT number valid in all countries. As you say this isn't likely to happen any time soon, although there is some effort being made to simplify things. The EU services directive which is now in force requires each member to provide a single point of contact for small service businesses setting up shop. There is still just as much bureaucracy involved, but that's because it's inflicted upon us by the individual member states, not the EU. I do think in the medium term we will see countries competing to simplify the processes involved in setting up shop. The Germans for example have already introduced a "mini GmbH" structure with reduced capital requirements as a reaction to the number of people setting up UK Ltd companies to trade in Germany.

[Paddy]

Why?

They aren't uniform in the US, or Switzerland. I don't know about China or India.

In fact, even within Germany they have non uniform taxes at the moment.

Non EU, US has a federal system (each state has legislative powers,
Non EU Switzerland is Federal with the cantons. Germany is Federal and the taxation for some of the states is written in the constitution.

There are discussions in the EU to enforce tax harmonisation but it will never happen.

I was a supporter of the EU but in years since; the bankers have taken over the running of it. The EU laws are made to help large corporations but when it comes to small business and contractors there is no freedom or harmonisation or work without hinderance in other EU countries. BTW I have worked in many other EU countries before and after membership so I do have experience of the bureaucracy involved.

[doodab]

There was a sizeable amount of people who warned the Euro was unfeasible in the long term because of the wide divergence of Euro economies.
So now that this entirely predictable outcome has come to pass, you're arguing that the solution to perpetuating what was a stupid idea in the first place is to create more more bureaucracy via a superstate?

I'm not saying it would be a solution to anything, I'm saying it seems just as likely an outcome as the death of the euro.

The only winners in that scenario would be the political and bureaucratic class who would feed at its trough.

That makes it all the more likely to come to pass, IMO.

[sasguru]

There was a sizeable amount of people who warned the Euro was unfeasible in the long term because of the wide divergence of Euro economies.
So now that this entirely predictable outcome has come to pass, you're arguing that the solution to perpetuating what was a stupid idea in the first place is to create more more bureaucracy via a superstate?
The only winners in that scenario would be the political and bureaucratic class who would feed at its trough.

[doodab]

The taxes would have to be uniform.

Why?

They aren't uniform in the US, or Switzerland. I don't know about China or India.

In fact, even within Germany they have non uniform taxes at the moment.

[doodab]

There's too much resistance to a super-state, and too much invested in the Euro concept to have it fail completely. I think the outcome of all this will be the Euro losing a few member countries, but carrying on largely unscathed. EU-haters always want to predict that the whole thing will collapse therefore proving them right, or that the whole thing will become a federal Europe dominated conveniently by ze Germans, therefore proving them right, but neither of those things are very likely.

I'm sure there won't be a great deal of resistance from the eurocrats themselves. I don't doubt it will be a hard sell for national leaders but the consensus among economists seems to be that it can only work with proper fiscal integration and an awful lot of people thought and still think this was always in the pipeline. My feeling is that the current crisis is simply accelerating the process so that we will see some form of federal tax system, perhaps replacing the existing contribution system, within the next decade or so rather than it taking another 30 years. I suspect that if the existing contribution system was replaced with something "fairer" that would make it an easier sell.

[Paddy]

Why do you think they would be taxed the same? The combination of federal taxes, state taxes, sales taxes and duties and such like needn't work out uniform at all.

The taxes would have to be uniform. Already there are EU guidelines for uniform on Duty for fuel etc although the UK ignores it.

Income tax would have to be a flat rate such as 10-20% it could work.
Road Tax, would you pay £300 per year (one month’s wage for some countries) for road tax?
Council Tax, the UK Council Tax is around £1,600 per year while in other parts of Europe it is as low as £20 per year.

[doodab]

What a load of cock from George Osborne. How much are we paying these ministers?

On one side of the Euro Zone, the countries’ citizens have high wages a good infrastructure, on the other side of the Euro Zone the countries’ citizens have low wages (300 Euros a month) and poor infrastructure such a mud roads and 1930s phone systems. How can they be taxed the same?

Why do you think they would be taxed the same? The combination of federal taxes, state taxes, sales taxes and duties and such like needn't work out uniform at all.

[VectraMan]

There's too much resistance to a super-state, and too much invested in the Euro concept to have it fail completely. I think the outcome of all this will be the Euro losing a few member countries, but carrying on largely unscathed. EU-haters always want to predict that the whole thing will collapse therefore proving them right, or that the whole thing will become a federal Europe dominated conveniently by ze Germans, therefore proving them right, but neither of those things are very likely.

[Paddy]

It's looks like George Osborne agrees with me



(from BBC News - George Osborne says time is short to save the euro)

The consensus seems to be that this can go one of two ways, either the euro disintegrates or there is a move towards a tighter fiscal union, which I think requires some sort of federal tax system and federal budget (which we already have to some degree). Although both scenarios seemed unlikely a few years ago one or the other now seems inevitable. It seems that on here at least I'm alone in thinking that the second option will come to pass with most of you thinking it's an impossibility. Anybody care to explain why?

What a load of cock from George Osborne. How much are we paying these ministers?

On one side of the Euro Zone, the countries’ citizens have high wages a good infrastructure, on the other side of the Euro Zone the countries’ citizens have low wages (300 Euros a month) and poor infrastructure such a mud roads and 1930s phone systems. How can they be taxed the same?

[Doggy Styles]

Nobody said it was impossible. They've said that for the euro to work at all the countries have got to become one. Be thankful we are not one of them.

George is playing political games.

[doodab]

It's looks like George Osborne agrees with me

Crucially, my European colleagues need to accept the remorseless logic of monetary union that leads from a single currency to greater fiscal integration.

(from BBC News - George Osborne says time is short to save the euro)

The consensus seems to be that this can go one of two ways, either the euro disintegrates or there is a move towards a tighter fiscal union, which I think requires some sort of federal tax system and federal budget (which we already have to some degree). Although both scenarios seemed unlikely a few years ago one or the other now seems inevitable. It seems that on here at least I'm alone in thinking that the second option will come to pass with most of you thinking it's an impossibility. Anybody care to explain why?