I read this in the Los Angeles Times of Friday, Sep. 23, 2011:
"Commerzbank CEO Martin Blessing told Frankfurt business journalists that euro zone leaders had bought time by setting up the EFSF rescue fund but had failed so far to find a path out of the crisis.
"I believe we have reached a crossroads,'' Blessing said. If Europe wanted to save the single currency, it must move toward a fiscal union. "A monetary union without a fiscal union, this construct has failed,'' he said."
That got me to thinking and wondering and pondering. Not much came of it but I thought that I would jot down a couple of thoughts anyway.
I remember when the countries of what is now the European Union were going through hell attempting to come to terms with what they were attempting to establish. Once they arrived at some consensus, there was then the difficulties involved in having the terms of the agreement passed through their respective governing systems. While the benefits of a monetary union are readily apparent and up to now have proven their worth, as Mr. Blessing pointed out, the shortfall of not having a central fiscal policy makes the monetary union very difficult to control and monitor.
If cracking the nut of a monetary union was difficult, my mind is frankly staggering around attempting to believe that a fiscal union could be achieved. Even in countries as vast as Canada and the United States, there are very contentious times when regions and interest groups perceive they are being slighted by the fiscal policy that the national governments assume. At least within a national sphere, there is the overriding consideration of the nation to drive policy. I am certain that the contentions that exist in North America would pale beside the enormous task of attempting to rationalize a fiscal policy among 17 different nations each with their own national interests to consider.
It is obvious that it is in the best interest of the countries belong to the European Union and more specifically to the eur. The logistics of attempting to have anything passed by the respective national legislative bodies is mind numbing. I could visualize it taking longer than a decade to pass one budget through the euro zone and obviously by then, the world would have moved on another nine years. Regardless of the fact that it seems like a non-starter, the way that economies are evolving in Europe, it seems like that is one of the two options. The other option is to obviously disband the euro zone entirely.