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No free gifts for south Europe at Cph EU debate

Danish economics minister Vestager and German finance minister Schäuble head to head at University of Copenhagen Thursday night

Europe needs a financial transaction fee or ‘Tobin tax’ to prevent another crisis. This is the short version of what Wolfgang Schäuble had to say when he met up with Margrethe Vestager, in a University of Copenhagen (UCPH) event yesterday, Thursday.

With a crucial gathering of European ministers happening today, Friday in Copenhagen, the two politicians clashed over key areas of policy. Apart from the tax, disagreements over structural reforms and the role of the EU were also displayed.

»A more ambitious approach to fiscal policy is needed!«, Wolfgang Schäuble declared in response to suggestions that he was overreaching in suggesting an EU-wide financial transaction tax.

No answers from ‘man with all the money’

Vestager is against taxing financial transaction. (Link in to story on financial transaction) She suggested that structural reforms, particularly in the Mediterranean countries, will provide a better way out of the recession.

Read a previous article that discusses the ups and down of this kind of tax here.

Schäuble, on his side expounded upon the role of financial markets in creating the current crisis, blaming high frequency trading, credit-default swaps and other financial ‘innovations’ for triggering the crisis. He argued »when financial markets become divorced from reality they cause harm, not good«.

Despite the moderator referring to Finance Minister Wolfgang Schäuble as »The man with all the money« he showed no willingness to contribute more money to troubled Southern economies.

»Before the euro, Italy and Greece had sky high interest rates, they will get used to having them again«.

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