Finance officials and experts gathered in Italy mostly agreed on Saturday that Europe needs deeper political union to preserve the troubled euro — even though persistent national identities made the prospect politically unlikely in the near future.Speakers at the annual Ambrosetti forum laboured to articulate the emerging existential dilemma: Monetary union struggles without central budget control, but member nations want independence; and the imbalances that result could lead to a calamitous breakup of the euro, which no one wants either, especially since it could send the world economy into a tailspin.
Unless Europeans agree “to complete economic and monetary union... with a fiscal union, with a strong governance, with a feeling that some political decision should be adopted in common by those who are sharing the single currency, we will not succeed,” said Joaquin Almunia, a vice-president of the EU commission.
While most governments bristle at this, Spanish finance minister Elena Salgado concurred, saying she supported “more fiscal integration” and noting that her country was in any case deeply dependent on trade with the rest of the EU.
The current structure depends on national governments acting in concert when needed.
But instead, said Italian economist Mario Monti, governments are becoming increasingly “short-termist” — preferring to pander to voters even if the result is dysfunction on the European level.