Are the Europeans going to double-down on the Union? There are rumors afoot that European leaders will seek tighter fiscal integration to accompany the already-tightly-coupled monetary union.
The New York Times picks up the story:
The idea is to create a central financial authority — with powers in areas like taxation, bond issuance and budget approval — that could eventually turn the euro zone into something resembling a United States of Europe.
Officials have been hesitant to publicly endorse such a drastic change. But privately they say the issue has gained urgency in recent months, as it has become clear that Europe’s current approach, which requires unanimity on any significant moves, is unwieldy and inefficient. The idea is being promoted by some global financial officials, who worry about the risks that continued uncertainty in Europe poses to the global economy.
If Europe can get past their sovereignty problems and emerge as a single monetary and fiscal union, much like the United States, that would be a huge shift in economic power. What would the UK and the non-Euro Scandinavian countries do then, I wonder?
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