2.Reduce or eradicate public pension systems. Such systems create strong incentives for countries to save heavily thus creating current account surpluses. In a common monetary union without the risk of appreciation countries pile up current account surpluses at the expense of other countries with the later having no quid pro quo such as a desirable currency. Instead if pensions are left to individuals, they can adjust their spending usually upwards and buy more products from abroad. Let markets do the saving and not the State.
3.Reduce public spending as much as possible. Certain social services can be sold by private providers and not the state. In this way the market sets up the prices and not the state by accumulating debt and effectively subsidizing the old in the detriment of the young or the unborn.
4.Make English the common European language and allow in this way free labor mobility. Countries with financial difficulties will find it easier to export labor and decrease the social costs of unemployment. Allow countries to compete in taxes and regulation and let markets decide the optimal allocation of resources. Less developed countries only with lax regulation and taxation can compete with advanced industrialized nations.
5. The above means the curtail of the power of eurobureauocracy. Enough with regulations, taxation and waste of resource. If Europe believes that countries should have a chance to compete in a fair way, then regulation and taxation ought to be the consideration of each respective country. Countries have a duty against their citizens not against bureaucrats.
6.Set up a permanent solvency and liquidity mechanism either through a non politicized agency or by outsourcing the operation to the IMF. To avoid moral hazard countries that will be subject to this new agency financing will be under conservatorship. Effectively they will submit their fiscal policy to external administrators as long as it needs to restore fiscal sustainability. If the issue is a short term liquidity crisis, countries will be assisted with a low interest rate loan.
7.Develop an attitude in favor of the young and productive. Stop pondering about pensions and healthcare. Instead focus on education, innovation and talent. Europeans spend quite a deal on their aging population by trying to sustain systems designed against the interests of the young and the productive. Old and unproductive require excess savings for their retirement while the young need investment to build for the future. Excess savings create instabilities while investment creates jobs, build know-how and innovation.
8.Broaden the mandate of the ECB to include not only stability of prices but also growth and employment. Allow the ECB to function not as a price police but also as a growth stimulant with active monetary policy.
Moral of the story. More markets, less state, more active ECB.