The European commission could be empowered to impose austerity measures on eurozone countries being bailed out, usurping the functions of government in countries such as Greece, Ireland, or Portugal. Bailed-out countries could also be stripped of their voting rights in the EU, under radical proposals being discussed at the highest level in Brussels before this week's crucial EU summit on the sovereign debt crisis.
Guardian
This is a coup. This is a coup by the 1% - or, more precisely, the 0.01%.
A confidential paper circulated to EU leaders on Tuesday by Herman Van Rompuy, the EU council president who will chair the summit on Thursday and Friday, says that eurobonds or the pooling of eurozone debt would be a powerful tool in resolving the crisis, despite fierce German resistance to the idea.
It calls for "more intrusive control of national budgetary policies by the EU" and lays out various options for enforcing fiscal discipline supra-nationally.
As Krugman and many others have demonstrated over and over, this problem was not caused by deficit spending. It. just. wasn't. This is not an attempt to resolve the Euro crisis, which is not being driven by high debts but by high interest rates. This is not an attempt to prevent another Euro crisis, which was not brought on by high debts. This is an attempt to set up a body which answers to the voters in no country which can decree austerity and deprive the victims of any further voice in Eurozone affairs.
This is a coup. This is what happens when you have supranational governmental authorities that don't actually answer to the voters of the member countries.
As part of a German-led drive for a eurozone "fiscal union", Van Rompuy highlights the potential for harmonising pension reforms, social security systems, labour market policy, and financial regulation: "Consideration could be given to use legislation to define minimum common features."
The 0.01% are after the European social net. They are not willing to miss the opportunity presented by the crisis caused by capital flows to the Eurozone periphery, which benefited the 0.01%, to cut taxes on themselves.
I hope the people of Europe rise up and cry "Halt!".
11:39 AM PT: Far too many comments repeat the zombie conservative lie that overspending lead to the problems of the Euro zone periphery. Here's a nice chart showing how level of taxation (e.g., total spending) is utterly completely and totally unrelated to current interest rates.
This chart shows that prior to 2007 the debt levels of Spain and Italy were declining relative to GDP - and that in fact Spanish debt was pretty low.
And here is a pair showing how Austria budget deficit is considerably SMALLER than Germany's, and yet their interest rates are rising relative to Germany.
To blame the problems of the Euro zone on "living beyond their means" or "deficit spending" or "debt" is to display ignorance of the situation - and after looking at these charts, it means you are dishonest. So stop doing that.