Sunday, March 4, 2012
Frank Barry and David McWilliams both had insightful pieces on the euro crisis and the fiscal compact treaty in today's Sunday Business Post (SBP content appears to be behind a paywall). Both make the point that the treaty won't solve the euro's problems. Fiscal deficits were not the cause of the eurozone crisis. Rather it was structural imbalances within the eurozone. The logic of monetary union requires a fiscal transfer union to help absorb the inevitable shocks that will occur in any large, diverse economy. Are Europeans prepared for the creation of a federal European (eurozone) state and the concomitant transfer of national sovereignty to a supra-national government?