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Bureaucrats Should Set Euro Fiscal Policy

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Nobel prize laureate Eric Maskin, said on Thursday that unelected bureaucrats should be the ones in charge of setting fiscal policy, not the government. He argued that they would be better equipped to make the right decisions for the country due to their non-political affiliation and freedom from public pressure. The public, Maskin said, don’t have the full information, thus are unable to factor in the repercussions of certain decisions. Despite their restricted knowledge, elected officials still feel obligated to make decisions according to their voters, even when they know it won’t be good for the country in the long run. Maskin is a Harvard professor and the Nobel Prize winner for Economics in 2007. He said this policy system is most needed in Europe, or the Eurozone in particular, where political office holders have to make decisions that would affect and are affected by the whole region, not just their own country.

Speaking at a conference for the European Central Bank (ECB), Maskin said “What there should be is a non-political body, like the ECB, that has the power to set binding spending and revenue targets”. He also added that “This body should also be able to make fiscal transfers when necessary between countries.” The role of this body would be to decide what the country needs to do, which the government would have to comply with, any way they choose. This would then take pressure off the government, who can pass on the blame to this body. He said the government would use taxes and spending however it deemed fit, but if it failed to do its part the responsibility will pass on to the bureaucratic body, for them to execute the policies.

 

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