Reprinted by permission, www.realclearworld.com
Four days ago, French President François Hollande declared his in-principle commitment to the creation of a ‘euro government, with the addition of a specific budget and a parliament to ensure democratic control.’ This is more an opening gambit in a debate about the terms of putative federalisation (a term Hollande was careful to avoid), than a statement of French commitment to it at all costs.
If some form of federalisation comes about, it will not be because the French especially desire it, but because the logic of the Euro ultimately demands it.
There has been talk of political and fiscal union since the crisis erupted five years ago. It was one of two options for resolving the Euro crisis that the German Government seriously considered, before ultimately rejecting it in favour of the inter- state negotiations that produced the treaties creating the European Fiscal Compact and the Single Supervisory Mechanism, or banking union.
But the Greek debacle has demonstrated the limits of the inter-governmental approach. In the final resort, enforcing Eurozone rules requires a form of political control over member- states.
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