“I would strongly argue that the euro countries should be much more hesitant when they are talking about moving towards a fiscal union. They might create something that solves very little, but undermines the whole fundamental structure of the European Union”, Sweden‘s minister of finance said.
His comments last week underline the depth of concern in Stockholm about increasing moves from eurozone countries to agree policies that exclude EU Member States that do not have the euro as their currency. His stance on fiscal union is in contrast to that of the UK, another non-eurozone EU member, which has urged moves towards further eurozone integration.
Mr Borg, one of the most respected finance ministers in Europe, launched into an unprompted attack on closer fiscal ties. “A fiscal union would create a tightly knit currency zone and dilute the decision-making power of the European Union and I believe in the European Union…I do think that you’re overstretching the democratic legitimacy when you’re pushing more resources and more powers to Brussels.”
He argued that southern European countries needed to improve their competitiveness first as transfers from the richer north could never compensate for a lack of growth.
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