Who in the eurozone can do what Alistair Darling has just done in extremis to save Britain's banks, as this $10 trillion house of cards falls down? There is no EU treasury or debt union to back up the single currency. The ECB is not allowed to launch bail-outs by EU law. Each country must save its own skin, yet none has full control of the policy instruments.
Sure, it's part of The Telegraph's house style to criticise the Euro and EU generally, but it makes a fair point about the basic problems of the common currency in this kind of crisis:
Germany has vetoed French and Italian ideas for an EU lifeboat fund. The former knows exactly where that leads. It is a Trojan horse that will be used one day to co-opt German taxpayers into rescues for less Teutonic EMU kin.
One can sympathise with Berlin. But sharing debts with Italy and Spain was implicit when they agreed to launch the euro.
A shared currency entails obligations. We have reached the watershed moment when Germany has to decide whether to put its full sovereign weight behind the EMU project or reveal that it is not prepared to do so in a crisis.
All this shows that the EU should either:
- Get it's act together and become a highly federalised super-state a la the USA, with a common economic policy, constitution, common military and foreign policy.
- Accept that it will only ever be an economic bloc, like a collection of Norways. Each country should retain control over central banks, economic policy etc.
The basic problem is that the creation of a United States of Europe requires local governments to unilaterally give up power, evolving legislative and executive power to a congressional European government, and devolving power concerning local policies to local assemblies.
But no politician will ever do this: so the EU is stuck between being a common market with minimal oversight and a federal superstate.
From a purely patriotic perspective it'd be nice to be a citizen (as opposed to a subject) of a liberal, democratic, enterprising global power that would effectively counterbalance China, Asia, and the USA, but I wish our politicos would pull their fingers out and get on with it.