| Excellent post. 1) you can't have a currency union, without a fiscal union; - correct. 2) you can't have a fiscal union, without a true political union; - unknown, but history is on your side. 3) the euro area is a currency union with neither a fiscal or a political union. - correct. There may be a way to incentivise independent states to act in their collective interest and thus create a fiscal union without a true political union. However, if there is such a way, it has certainly never been applied to date for the Eurozone. This is the grand experiment ongoing in the EMU. In a sense, the experiment not only already failed, but failed from the outset due to states choosing to ignore leverage rules in the 1997 Stability and Growth Pact, including even Germany. The probability of this ending well, or without Germans paying in some shape or form and potentially severely against their long-term interests, is low. If Germany had any sense, they will be making preparations to leave at any time, possibly taking the few remaining Germanic (+Switzerland) and Scandinavian creditor nations with them too. |