Corona Crisis: Taxpayers Association of Europe (TAE) Warns Against Debt Communitisation Through the Backdoor
Something critical voices have long been fearing is now threatening to become reality. Under the pretext of overcoming the Corona crisis comprehensive changes in European financial and tax policy are to be implemented on the quiet. The Taxpayers Association of Europe (TAE) warns strongly against debt communitisation, corona bonds or tax harmonisation, as well as against jettison any inhibitions towards the accumulation of debt of some EU member states.
Italy's Prime Minister Guiseppe Conte, for example, had called for community aid to be made available to his country without any conditions or requirements. These should either be special community bonds (Corona bonds) or access to largely unconditional credit lines from the European rescue fund ESM.
The president of the European Taxpayers Organisation, Rolf von Hohenhau, fears that the immense accumulated debts of Italy, France, Portugal and Greece will now be passed on to countries with a reasonably sound budgetary policy such as Germany, Finland and the Netherlands.
Von Hohenhau said: “We are pretending that monies are falling from the sky. But that is not the case! In the end, the citizens of the economically strong countries will pay for it through tax increases. We are covering our grandchildren in debts which will then have a noticeable impact on their lives and economies. That is not fair. I am angry that they want to abuse the crisis to push through fiscal decisions that they have shied away from thus far for reasons of expected resistance.”
The taxpayer president went on to say that the European Commission had already announced that it would apply maximum flexibility to debt rules and that the ECB had also ensured favourable refinancing conditions in the member states with its latest bond purchasing programme. There is no discernible reason whatsoever for community liability. Instead of talking about a communitarisation of debt, the EU members should first take all measures in their countries to get people and companies through the Corona crisis in good shape.
In conclusion, taxpayer president Rolf von Hohenhau appeals to all EU heads of state and government: “Please do not just think of financial aid in the Corona crisis. Lower taxes - especially now in the crisis - and thereby relieve the burden on people and companies. Create purchasing power and optimal conditions for future growth.”
Brussels, March 27, 2020