##eded the predictive quality of financial or monetary indicators for future price developments. in this regard, it is also a “ work in progress ”. 3. 2 principle of liability the second fundamental principle of monetary union is the principle of individual national responsibility. much as a market economy can function only if businesspersons assume responsibility for the consequences of their decisions, a monetary union, too, can only function if governments and banks carry the responsibility for their decisions. in the maastricht treaty, monetary union is defined in such a way that monetary and foreign exchange policy are communitised but fiscal and economic policy remain a national responsibility. as a result of this asymmetrical set - up – one monetary policy, 18 fiscal policies – the stability of the single currency is under constant tension. the already existing propensity to run up debt is even higher for governments in monetary union as the negative repercussion of excessive debt can be passed on in part to other member states. in addition, it was clear when the monetary union was set up that the member states would borrow with money they could not create on their own ; doubts about bis central bankers ’ speeches the solvency of a country could therefore more quickly have serious consequences for the financial stability of the country in question and thus spread to the other member states. this is one of the reasons why fiscal discipline is so important in a monetary union, which is why precautions to prevent risks to stability were inserted into the treaty. first, the member states agreed, in particular, to avoid excessive deficits ; the debt rules were fleshed out in the stability and growth pact. second, monetary financing of governments was prohibited by banning central banks from lending to member states. third, the member states agreed that each country is and remains responsible for its own debt. in addition, the no - bailout rule states that no eu institution and no member state is responsible for the debt of another. in the 1992 study on unity and plurality in europe already cited above, the kronberger kreis around wolfram engels critically examined the issue of fiscal discipline, stating that “ there are, however, also factors that give rise to the fear that convergence with fiscal discipline may not be strong enough to prevent undesirable developments ”. the hope prior to monetary union had been that the financial markets would exert a disciplinary effect on fiscal policy. it was expected that the exclusion of mutual liability would cause investors in government securities to demand adequate risk

for a competitive economy : open markets, rights to private property, freedom of contract and the principle of liability, which i have already mentioned. he defines liability as an essential regulatory policy institution. in his “ principles of economic policy ”, he uses the example of an economic order with private property and a centrally bis central bankers ’ speeches controlled economy to demonstrate what happens when liability and control ( steering power ) drift apart. given the institutional framework of monetary union, this problem is still highly topical, and i shall revisit it later on. eucken names “ consistency of economic policy ” as the final constitutive principle of competitive order. he complains that economic policymakers suffer from a nervous restlessness, often today dispensing with those very rules that were in place yesterday. little has changed over time. eucken ’ s words still ring true regarding current economic policy measures in berlin. the introduction of a statutory minimum wage of €8. 50 to be applied across the board launches a large - scale macroeconomic experiment which, if applied as intended, may endanger the labour market success of recent years. and the pension package will go back on some previous pension reforms and create incentives for early retirement, thwarting the necessary extension of working life given an ageing population. such a policy will place an additional burden on future generations but, as groucho marx once said, “ why should i do anything for posterity? what has posterity ever done for me? ” while the ordoliberals of the freiburg school stressed the importance of ordnungspolitik ( translatable as regulatory policy ) and mostly rejected intervention in economic processes ( such as introducing a minimum wage ), the founding fathers of the social market economy saw a need for government economic policy over and beyond this framework. however, economic policy should be in line with the market mechanism and comply with the principle of subsidiarity. the principle of economic policy in line with the market mechanism and the principle of subsidiarity, borrowed from catholic social teachings, are thus likewise to be seen as the founding principles of our economic order. thus, market economy principles have not just shaped the economic system in germany, but are also major pillars of european integration. a constitutive principle of european economic integration was, and still is, non - discrimination against external providers of goods and services. the four fundamental freedoms of the single market are the result of this principle and are sum