The EU got it right the first time. All those member states in the Euro do need a single economic government. They are limping towards it, crab like and dishonestly. Countries like the UK that have stayed out of the Euro need to stay out of the many moves to economic government, and should use these negotiations to loosen Brussel’s grip on them at the same time as Brussels has to tighten it over Euro members. It should be done by Treaty change so we can have a referendum on the proposals and all that is related to them.
As I explained repeatedly during the big arguments over the Uk joining the Euro at the start of the era of UK federalist government in 1997, joining a single currency is like sharing a bank account with the neighbours. It’s not something most rational poeople would ever do, in the interests of staying friends with the neighbours.
If you must, you need to control the neighbour’s spending and borrowing, to make sure there is enough money in the joint bank account when you need it, and to make sure the neighbour does not draw out too much of what you have earned and put his feet up. That is what the argument with Greece is all about. Germany goes out to work in world markets and earns a surplus. Some now think Greece, which has run up a large overdraft, should be able to draw on the German earnings to repay some of the debt.
That is, of course, what has to happen if you wish to keep the joint bank account and keep the bank manager happy – that is what they are now reluctantly recognising they have to do to keep the single currency going. If I were a German I would strongly want to have much more Brussels authority over Greek spending and borrowing, so their drawings on the common bank account do not get out of hand. That is what yesterday was all about.