The front page story dealing with European Commission plans to set up a European Monetary Fund will be music to the ears of the citizens of this Continent.

It is clear, from the very public backlash, that while people understand that this Continent must tighten the belt and implement austerity measures to curb the ballooning deficits of the PIGS (Portugal, Ireland, Greece and Spain), they are also angry at the way that European governments have systematically tried to hush the dire straits of individual economies.

The bubble finally burst when Greek Prime Minister George Papandreou lifted the lid on the mess he had found after he defeated his rival Kostas Karamanlis in the last general election. Greece’s deficit soared to an unbelievable 12.7 per cent of GDP when the Maastricht Treaty stipulates that three per cent is the ceiling.

This sparked fears of contagion within the eurozone and the rest of the PIGS decided to come clean – Spain, Portugal and Ireland announced that they too were way over the established criteria.

Aside from all the measures which the European Commission forced onto these states, there was also talk of direct intervention by the said EC in cases where nations within the eurozone bloc, shall we say, mess up. But this has given way to a new proposal which has been announced by the German Foreign Minister to set up a European Monetary Fund to regulate the financial sectors of eurozone members. Of course, this all takes us back to the age-old worry about the euro currency. Many, if not the vast majority, of economists and political analysts believe that while the euro is in itself a very positive thing, one can never have true economic unity without political unity.

This fear manifested itself in the Greek debacle as it was shown that if a government wants to cook its books, it can very well do so and do so with impunity. In an effort to bypass the problem of not having a Federal Europe, the boffins have decided that a model similar to the Washington International Monetary Fund should be implemented. We have heard of many projects in the past which on paper sound good, but can never yield concrete results (such as having the EC monitor individual economies which we mentioned earlier).

This time, though, it seems like Europe means business and proposes to grant the EMF executive powers and a good deal of clout. Initial plans suggest that in the case of default, the EMF will have the power to prevent countries from spending EU cohesion funds (which are of course used as an unofficial form of subsidy in ‘developing’ EU nations such as Malta, or the former Warsaw Pact bloc) and also to prevent repeated offenders from voting in matters which are put to the EU council. And the most heavy tool proposed is to actually suspend (and even eject) countries from the eurozone.

To quote George Orwell’s masterpiece 1984, European Governments will have to tread very carefully as Big Brother will now be watching them. It will mean that while Europe is still not politically unified, there will be much more intense scrutiny of eurozone finances and there will be consequences that are far more severe than street protests. And to close, one must also add that while all PIGS are supposed to be equal, we hope that some PIGS will not be more equal than others.