{"id":5384,"date":"2019-05-24T12:30:30","date_gmt":"2019-05-24T12:30:30","guid":{"rendered":"https:\/\/pan.thatscommunication.de\/incentive-for-moral-hazard\/"},"modified":"2026-10-19T19:00:52","modified_gmt":"2026-10-19T19:00:52","slug":"incentive-for-moral-hazard","status":"publish","type":"post","link":"https:\/\/pan.thatscommunication.de\/en\/incentive-for-moral-hazard\/","title":{"rendered":"Incentive for Moral Hazard"},"content":{"rendered":"<p><em>Values must also be implemented in politics. The banking union is one such example. A commentary by <a href=\"http:\/\/www.karlvonhabsburg.at\">Karl von Habsburg<\/a>.  <\/em><\/p>\n<p><!--more--><\/p>\n<p>One of the points in the <a href=\"https:\/\/pan.thatscommunication.de\/fuer-ein-starkes-europa-for-a-strong-europe\/\">position paper<\/a> adopted by the Paneuropa Movement Austria for the European elections states: \u201cWe reject a banking union, for example \u2013 which, by extending the community of liability, is an incentive for moral hazard rather than due diligence \u2013 just as we reject the idea of a separate budget for the eurozone or a separate parliament for the eurozone.\u201d The two points regarding the eurozone would only create an additional institution that could only speak for a part of the European Union, and thus, like the separate budget for the eurozone, lead to a further fragmentation of EU policy. This may be of interest to those dreaming of a long march through the institutions, but it brings no new momentum to European integration.  <\/p>\n<p>Regarding the rejection of the banking union, a critical remark was once made in a conversation: Why must the Paneuropa Movement concern itself with such points; surely it should be more about the politics of values. That is exactly the point. We talk a lot and very fondly about values, because it is often very easy to philosophise beautifully about them, but ultimately the answer to the question is missing: how does one then implement values? Or to put it another way: every concrete political measure represents an underlying value. The banking union, too, is an expression of a certain set of values. It stands for state interventionism and planned-economy interference.     <\/p>\n<p>One sentence before the mention of the banking union in the position paper, it states that the Paneuropa Movement is committed to an economic policy \u201coriented towards the principles of the market economy and the rule of law\u201d. <a href=\"https:\/\/www.karlvonhabsburg.at\/news-detail\/freier-binnenmarkt-statt-nationaler-protektionismen\/\">Market economy and the rule of law<\/a> are closely linked. The rule of law sets framework conditions that apply to everyone, regardless of how close they are to politics, regardless of what position they hold. The rule of law does not become an economic actor. The market economy recognises the important principle of individual responsibility, of liability (in both a positive and negative sense) for one&#8217;s own actions. It is precisely these principles \u2013 values \u2013 that the banking union contradicts.    <\/p>\n<p>Banks and their owners must also be liable for mistakes. The privatisation of profits and socialisation of losses contradicts the principles of the market economy and also the rule of law. Naturally, state authorities can intervene in a banking crisis to ensure the maintenance of payment transactions until the ailing bank is wound up. But every bank must be liable for itself in order to prevent the crisis from spreading.   <\/p>\n<p>A larger liability union obscures the liability of individual institutions. The larger the liability union becomes, the higher the incentive for moral hazard, i.e. for misconduct. We know the pattern from many studies on the behaviour of groups going out to eat together. Normally, everyone pays their own bill, unless a specific invitation is issued by someone who then also has to pay. If, on the other hand, it is agreed that there is a joint bill which is then divided by the number of heads, individual participants in the group often forget their usual thriftiness and hide the higher costs they have caused within the payment group. Those who order sparingly lose out because they have to pay more than the risk they took themselves. This example can be transferred to other liability unions.      <\/p>\n<p>Economic policy decisions therefore also concern value systems. Anyone who is serious about the politics of values must also evaluate their concrete implementation. <\/p>\n<p>Exercise your right to vote on Sunday. Next week there will be some remarks on the results of the European elections. <\/p>\n<p>The article originally appeared on the site of <a href=\"http:\/\/www.karlvonhabsburg.at\/weblog\/\">Karl von Habsburg<\/a>.<\/p>\n<p>\u00a9 Featured image: European Union 2015<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Values must also be implemented in politics. The banking union is one such example. A commentary by Karl von Habsburg.<\/p>\n","protected":false},"author":5,"featured_media":5385,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pmpro_default_level":"","_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":""},"categories":[727],"tags":[1047,1046,1048,888,1049,769,1045],"class_list":["post-5384","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-banking-union","tag-individual-responsibility","tag-liability","tag-market-economy","tag-moral-hazard","tag-rule-of-law","tag-union-of-values","pmpro-has-access"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Incentive for Moral Hazard - Paneuropa<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Incentive for Moral Hazard - Paneuropa\" \/>\n<meta property=\"og:description\" content=\"Values must also be implemented in politics. 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