Sunday, July 29, 2012

Europe’s political union is an idea worthy of satire

by Otmar Issing

Financial Times

July 29, 2012

Recent history, and not just that of Germany, teaches us that the idea of sustaining an economic and monetary union over time without political union is a fallacy.” Has former German chancellor Helmut Kohl, who gave this warning in 1991, been proven right by the eurozone crisis? Should Europe now seek political union?

Forming such a union implies nothing less than the end of the nation state. A European government would have to be created with powers of taxation and public spending, a corresponding European parliament and so on. There are powerful arguments why “Europe” – whatever this means and how many countries might be included – should have this ambition. However, to base the argument for integration primarily on saving monetary union is anything but convincing. And it is more than strange when foreign politicians and experts are pressing eurozone states to give up national sovereignty, out of fear that a collapse of monetary union might have severe consequences for their economies. Juvenal would have said: Difficile est satiram non scribere (It is difficult not to write a satire).

But, independent of any answer to these questions, political union is impossible to achieve within a few years. It cannot be a means of crisis management. And here comes the dangerous part: any proposals, for example, to extend the amount and scope of financial support mechanisms premised on further integration in the future. Promising later action against requests for more money now does not look like a credible strategy – quite the opposite. This approach would severely undermine the idea of establishing political union.


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