Unless political power in Europe is Europeanized, with the current confederation evolving into a federation, the eurozone – and the EU as a whole – will disintegrate. The political, economic, and financial costs of renationalization would be enormous; an EU collapse is feared around the world for good reason.To say it's difficult to see how that can be achieved in time to save the current euro structure is an understatement. Germany is pushing for Greece's referendum on the austerity plan of the EU that will further impoverish Greece to be held in December. There will not be a United States of Europe created during the coming month. There is a less drastic short-term policy change that could avert an immediate euro collapse: a decision by the European Central Bank (ECB) to become a lender of last resort to eurozone countries.
By contrast, if the currency union's political deficit is addressed now, first by establishing a fiscal union (a common budget and common liabilities), a real political federation will be possible. And let us be clear: anything less than a United States of Europe will not be powerful enough to prevent the looming disaster.
Fischer's piece gives a good feel for what a crying shame this situation is.
Tags: eu, euro, european union, joschka fischer