This is another EU Special, reflecting the importance of the issue. And the fact that most readers aren't terribly interested in reading about it in my normal posts. . . .
In Britain's obnoxious right-wing rag, The Daily Mail, columnist Simon Heffer makes the following points:-
Be in no doubt what fiscal union means: it is one economic policy, one taxation system, one social security system, one debt, one economy, one finance minister. And all of the above would be German.
If Germany is to continue to prosper, Europe must prosper: but a ruthless solution may have to be imposed in order for that to happen. If the European project is to continue, Germany will not merely have to underwrite it, but control it.
For good measure, he ends his article with a gratuitous reference to Hitler:-
Where Hitler failed by military means to conquer Europe, modern Germans are succeeding through trade and financial discipline. Welcome to the Fourth Reich.
On the other side of the political divide, The Guardian dismisses this as a rant and totally rejects the notion that we're moving towards an EU whose members' budgets and expenditure are controlled by Germany:-
Nobody, least of all in Germany, believes the often vague ideas embraced by Merkel and Sarkozy stand a cat in hell's chance of adoption.
Thus, the notion that the EU's economic and monetary affairs commissioner would be empowered to veto national budgets for their failure to comply with the stability and growth pact is a non-starter. All we're really talking about is Van Rompuy's own idea, endorsed by the commission, for a 'European semester' – a six-month period in which Brussels scrutinises and suggests amendments to national budgets.
What Merkel and Sarkozy, both facing re-election within the next nine to 24 months, are talking about is reinforcing their political control of the eurozone – and possibly the EU.
The so-called German takeover of Europe is, in reality, a typically messy stand-off/compromise between the EU's two biggest protagonists: France and Germany. Sarko gets Merkel finally to back his European version of the Tobin tax on financial transactions (a total non-runner) and she gets him finally to back the German model of a "debt brake" written into national constitutions (ditto).
So, if this columnist is to be believed, not only did Tuesday's Merkozy summit produce only words but in addition these were meaningless.
No wonder the markets are spooked.
Interestingly, someone has now extended the Two-Euro idea into a Three-Way Split, placing the UK in the Scandinavian/ Nordic group:-
It looks now as if the whole of the Brussels system has become the sick man of Europe. But we do not know how to get the Brussels system out of the bed in which we are all lying.
If no progress can be made there might be a split between three groups: the Scandinavian countries, the strong central countries and the weaker Mediterranean powers.
This would give Britain, Ireland and the Scandinavians a broader opportunity to govern their own affairs in the light of their own economic conditions. It would enable the weaker Mediterranean powers to be supported through a separate system with less exposure to the finances of the rest of Europe. It would allow the core countries of Germany, France and their immediate neighbours to define the eurozone’s objectives so the burden was manageable for them.
If Europe was starting with a blank sheet, there might well be a reorganisation along these or similar lines.
So . . Who's right? Who's got the best crystal ball? Does anyone really understand what's going on? Can anyone come up with a global solution before world events engulf us all and take the decisions for us?
Stay tuned . . .