Why preclude a political, extra-market, for recycling surpluses which was, as the United States realised in the 1940s, essential to maintaining an asymmetric monetary union between high and low capital intensity economies? Because European elites assumed that the United States would be playing this stabilising role on behalf of Europe ad infinitum and, therefore, that Europe could forever freeload on the US-directed surplus recycling. Thus, the Eurozone’s ‘constitutional’ foundation, or what I refer to as the Principle of Perfectly Separable Debts and Banking Sectors.He warns against further political integration of the EU at this point, until they get the eurozone out of depression mode.
As long as the United States did play that stabilising role globally (that is, until the Fall of 2008), the Eurozone worked reasonably well, at least on the surface. With no need to centralise fiscal policies, the European Union could legitimise the lack of a European demos to keep in check its (a) Brussels-based technocracy and (b) a law-making process unconstrained by anything resembling a sovereign Parliament. With national parliaments supposedly exercising democratic control over fiscal policy, the EU’s institutions worked in the interests of an unholy alliance between a Central European heavy industry cartel, high output (mainly French) farmers, and a burgeoning financial sector. [my emphasis in bold]
He addresses the democratic deficit in the current structure of the European Union that is so much of a concern for democratic-minded critics of the EU. (In current terms, "euro skeptics" refers to rightwing nationalist opponents of the Union, "euro critics" to pro-democracy, pro-EU people concerned about the very real problems of the Union, especially Angela Merkel's Herbert Hoover/Heinrich Brüning economic policies.