European ministers look to greater fiscal unity
By Dale McFeatters
Since the eurozone was launched in 1999, it has, like the European Union, been an improbable success, especially given Europe's long history of economic and military rivalries.
Now the 17-nation eurozone with its common currency, the euro, finds itself under threat and from a cause that has long been identified: There is no central governance to enforce fiscal policy.
There was no way, for example, to prevent successive Greek governments from running up huge budget deficits that the country could not sustain, leaving Greece to beg for a bailout from its wealthier and less feckless partners in the currency union.
The Greeks are unhappy with the austerity measures forced upon them, but did elect a new government that is committed to the EU and the euro. However, facing severe social unrest, Greece is asking for less onerous terms.
Spain and Italy face similar problems, and the German public is growing weary of bailing out governments that knowingly overspend and then, as the Germans see it, come to them to pick up the tab.
The solution, which for understandable reasons no government is really willing to face up to, is to turn the monetary union into more of a political union, with central governance, common fiscal policies and a European Monetary Fund to stabilize errant economies, similar to the International Monetary Fund, perhaps with the $640 billion already in the eurozone's stabilization fund as seed money. The whole would be overseen by European finance ministers with true transnational authority.
The plan was laid out by 10 eurozone finance ministers, who also proposed a European army.
These proposals will be discussed in greater detail at a summit of EU leaders this month. Most of the EU nations seem willing to entertain the idea; Great Britain is emphatically not. But the British are generally the last to come around on these ideas.
Britain derided the idea of European-wide open borders and free trade, but now is taking advantage of those EU perks to try to lure French businesses to Britain now that France has a socialist government.
The idea of a tighter and more politically and fiscally united Europe may seem far-fetched, but so did the whole idea of a European Union when its precursor, a five-nation, coal-and-iron community, was first floated in 1950.
Dale McFeatters is an editorial writer for Scripps Howard News Service (www.scrippsnews.com).