The idea of a European Monetary Fund seems to be gathering momentum. This is a good example of how the EU operates; unlike the Obama administration, it never lets a good crisis go to waste. Since the euro was set up, economists have pointed out that an integrated monetary policy doesn’t make a lot of sense without some integration of fiscal policy — and, indeed, more integration of national economies. But at the time, fiscal integration was not on the cards — so the EU went ahead anyway, as another step towards the goal of political integration. Now that the weaknesses of the system have been exposed, the degree of existing integration becomes a justification for even more. 

Note that this has taken years. Maybe you think the Lisbon Treaty furore and Britain’s rejection of the euro have put the Eurocrats in their box for a while. Don’t be fooled — the EU is a very patient beast.

The problem with the EU is not that any of this matters much today. The problems will come in a generation or more, when a single European government and economic system mean that national populations are powerless to decide their own fate. A single monetary and fiscal policy will mean some countries fall permanently behind the rest, their recessions exacerbated by interest rates and taxes that are wrong for them but right for the whole Eurozone. “It’s for the greater good”, the ghastly technocrats will intone. In the US, that argument carries some weight — after all, there is an American identity and it’s not that much of a wrench to move from Idaho to California if growth prospects in the former seem permanently depressed. But will the people of Greece or Spain be prepared to make sacrifices for the sake of their German brothers and sisters, or to move in their droves to Germany because that is where the jobs are? I suspect not. And large unemployed populations with a sense of national decline and no real political outlet are not a recipe for peace and stability.