My shorthand is lazy, but it’s no different than California ($3.3T GDP), Texas ($2.1T), and New York ($2T) carrying the rest of the US states. Europe is stronger together than apart (economically speaking), and this is a good deal for everyone involved (my two cents).
I admit there is always a bit of contention when macroeconomic stress limits are tested. Such is the nature of unions.
The United States and the individual states share both a fiscal and monetary union.
The EU, on the other hand, is a monetary union but not a fiscal union and our expectations for that arrangement range from hopeful to outright fatalism.
I agree with you in theory/academically but disagree with you that the difference matters in application. The only difference is the force with which the dissenting or economically weaker parties can be dragged by the majority; in both cases, the dissenting are still getting dragged (and drag applied to the majority). There is no appetite in either case to dissolve the monetary union. Witness how poorly it went for the UK leaving the EU, and that’s with maintaining their own currency.
In the UK much of the popular support for the EU was from people looking to escape their own god awful politicians, that things didn’t go well after leaving, due to the same god awful politicians, wasn’t a big surprise. Technically one way to fix it would be to elect better politicians, but it’s the UK so that doesn’t seem to be an option.
I dislike Thatcher, a lot. However she was ahead of the curve in 1990. This is a quote from her last speech in the House of Commons as PM:
“ [...] the point of that kind of Europe with a central bank is no democracy, taking powers away from every single Parliament, and having a single currency, a monetary policy and interest rates which take all political power away from us.”
> There are still parliaments in EU countries, they still debate and vote laws.
Greece cannot pass laws through parliament without Brussels approval. Italy, effectively need to stay in-line with the EU's program otherwise the EU aid will stop... so effectively these parliaments vote whatever they're told by Brussels to vote.
> Yeah, some matters are also discussed at the EU level. That's what happens when different entities make and join a club. They have to collaborate.
I don't see much collaboration happening tbh (energy, immigration, etc.). I could point articles but I think we have a completely different view on how's Europe actually governed right now.
The quote is technically wrong only in the "taking powers away from every single Parliament" part, as central banks are usually independent. As far as monetary policy goes, adopting euro is losing independence.
That might be a positive thing even just in the context of monetary policy, but that does not really make the quote incorrect.
The plan was always to use a debt crisis to turn the monetary union into a fiscal union. I guess therein lies the fatalism. But fiscal unions were much easier to form when money was gold backed and financialization wasn’t so rampant. Plus people have seen the effects of Germany being able to export unemployment via its surplus is it upsetting other Europeans and building anti-EU sentiment. In my view the debt crisis is structurally baked in and guaranteed to happen, what I’m uncertain about is the extent of the backlash EU leadership will receive from the attempt at normalizing fiscal policy.
The US is very different. States don’t have firepower. The Federal holds all the final cards, and it has little loyalty to any one state. That’s very much the difference to EU “union”.
I admit there is always a bit of contention when macroeconomic stress limits are tested. Such is the nature of unions.