Transfer union also transfer community (transfer union)

In the spring of 2010, a widespread, insinuating term used in connection with the establishment of the European Stabilization Mechanism and the aid provided to Greece, which was close to national bankruptcy, and then just one year later also to Portugal and other members of the euro area. – The essential pillar of the European Monetary Union was the principle that no member state should be liable for the debts of another. Such a non-bail-out clause is explicitly laid down in Article 125 TFEU. Further, each member was required and expected to act fairly toward the common currency. By providing aid as in the case of Greece, Portugal, Spain, Cyprus and others, incentives are misaligned: fiscal discipline is eroded. Instead of solidarity toward the common currency – with the EUR, Greece received stable money for the first time in its history in many decades and a previously unknown low level of interest rates – reliance is placed on the willingness of citizens of other member states that abide by the treaty rules to make sacrifices. – The frequently voiced argument that the EU is already a transfer union is obviously wrong. This is because transfers between member states, such as agricultural payments, are precisely defined in terms of their purpose and limited in terms of their amount. According to the EU Treaty, transfers due to excessive budget deficits in one country or – what is usually associated with this – loss of competitiveness are not subject to any payment obligation on the part of other members. In addition, it is a fact of experience that such undesirable developments lead to a momentum, in many respects unchecked, with ever stronger driving forces. Soon an extent is reached that in the end noticeably impairs the standard of living of the people in the donor countries. This will bring parties to political power that have written an exit into their program (“Europe – not like this!”). – See devaluation, fiscal, buyouts, central banking, bail-out, banking union, risk sharing, blame game, deficit financing ban, bank resolution facility, European Resolution Fund, European Stabilization Mechanism, EMU blow-up, ECB sin-fall, gold sacrifice, Greek crisis, peer pressure, Helleno mania, Irish crisis, Neuro, policy clamp, Portugal crisis, rescue, bailout, debt club, debt drug, seven percent limit, solidarity, financial, blocked account, sovereign bond, Stability and Growth Pact, stabilization mechanism, European, asset levy, treaty fidelity, debt-productivity linkage, growth-debt fact, historical. – Cf. Monthly Report of the Deutsche Bundesbank of May 2010, pp. 12 f. (on guarantees in the course of the European Stabilization Mechanism), Monthly Report of the Deutsche Bundesbank of November 2010, pp. 11 f., p. 67 (corresponding aid must be preceded by credible consolidation measures by the problem countries), Monthly Report of the Deutsche Bundesbank of August 2011, pp. 66 ff. (grave reservations about the indirect march toward a transfer union).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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