THE Dutch prime minister and finance minister have a remarkable piece in today's FT about how budgetary discipline might be enforced after an EU bailout. Calling for independent supervision of member country budgets, the duo states that

Independent supervision requires a commissioner for budgetary discipline. His or her powers should be at least comparable to those of the competition commissioner. The new commissioner should be given clear powers to set requirements for the budgetary policy of countries that run excessive deficits. The first step is to require the country concerned to make adjustments to its public finances. If the results are insufficient, the commissioner can force a country to take measures to put its finances in order, for example by raising additional tax revenue. At this stage sanctions can also be imposed, such as reduced payments from the European Union Cohesion and Structural Funds, or higher contributions to the EU budget. The final stage will involve preventive supervision, and the budget will have to be approved by the commissioner before it can be presented to parliament. At this stage, the member state's voting rights can also be suspended.

There has been a lot of talk about how voters in creditor countries like Germany are unhappy about the cost of bailing out Greece, Portugal etc. But how would the voters of debtor countries react to their policies being changed by an unelected EU commissioner?

One answer may be that there is, in practice, little difference between the views of voters being outweighed by an EU commissioner or by the dictates of the IMF or indeed the bond market vigilantes. A famous incident in British history was 1931 when a "bankers' ramp" first tried to force the Labour government to cut unemployment benefits by 20% and then installed a coalition government under Ramsay Macdonald to carry out the bankers' programme. The answer to that dilemma is simple; if you don't want to be at the mercy of creditors, don't borrow lots of money from them.

But it is a hard lesson to learn. A vote for or against a candidate (or for a yes/no referendum proposition) is far short of making the kind of complex decisions that are needed to balance a budget. So it is natural to believe in a candidate who says a)I can cut your taxes without cutting your services or b)I can increase your services without raising your taxes.

When push comes to shove, as Reinhart and Rogoff have shown, the state can simply renege on its debts, making it impossible for the creditor to enforce his rights (classic examples are Russia in 1917 and China in 1949). Medieval creditors learned not to regard lending to monarchs as risk-free; ask too insistently for your money back and you could lose your head.

Western democracies have a better repayment record than tyrannies because they have enjoyed a long period of economic growth with rising tax revenues. But there is still a question of whether voters will ever impoverish themselves to suit foreign creditors; note that Iceland has rejected debt deals in referenda. (The deals were regarded as unfair, but debtors often take that line.)

The Dutch ministers suggest that countries which don't like these arrangements will always have an alternative; leaving the euro but as Herman van Rompuy (president of the European Council) pointed out yesterday, there is currently no provision for exit in the treaty. That would require an amendment which would have to be passed by all member states; leaving the possibility that a country might want to leave but could not legally do so because Cyprus or Portugal had not passed the relevant legislation.

The broader questions perhaps are these; if the rights of voters in creditor nations and those in debtor nations, how is this dilemma sorted out? Do voters lose some of their rights if they vote for irresponsible policies that break the rules of maths? What happens if the costs fall on young people who did not vote for the bad policies in the first place? One could blame the politicians in the debtor countries, but ejecting them from office or even jailing them, will not reduce the debts by one cent.