Quote Originally Posted by noel View Post
So we need an EU fiscal union then? (lights blue touch-paper)
Certainly the eurozone needs a fiscal union. The problem is that there appears to be little enthusiasm for it among the member states. As Oracle and WP have said it is unlikely that Germany will wear it. Mrs Merkel has to answer to her electorate and while the West Germans could tolerate a mass transfer of wealth to their fellow Germans in the east to achieve unification they don’t feel the same way towards Greeks and Italians. By the same token the Southern Europeans don’t want their lives controlled by the northern states.

And therein lies the nub of it. The idea of the nation state as opposed to a supranational organisation remains resilient and not just here in the UK. Fiscal transfers are accepted between richer and poorer regions with scarcely a grumble because rightly or wrongly there is a perceived shared identity. This doesn’t exist between the nation states of the European Union. I think the resistance to the idea of a political and fiscal union is why the EU didn’t set it up before they launched the euro in the first place.