Euro failing due to lack of economic union

Europe has reached a crossroads with the Brussels summit, Wolfgang Münchau writes in the liberal business paper Financial Times Deutschland, fearing that the the lack of an economic union worth the name will be the euro's downfall: "I don't believe that Europe's political leadership really understands the crisis, not even Merkel. If she did she'd use other words to describe it. The bottom line is that this is not a crisis of bad budgeting, not even in Greece. Nor is it a crisis of poor economic policy decisions, as the Chancellor said recently in the Bundestag about Spain. ... The cause of this crisis is a monetary union without transfers or a common economic policy. ... If the euro fails, it will be solely because it was not embedded in a true economic union: its banks are supervised and recapitalised nationally and each country issues its own bonds. The clauses included in the Treaty of Maastricht and later in the Stability and Growth Pact are a fair weather construction that can never withstand a dangerous hurricane."

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