As someone with a more than passing interest and knowledge in politics, policy, finance and markets, I am less than convinced about the idea of greater fiscal integration amongst EU or eurozone countries.
This lack of personal support might be because I am British and we are pretty much born and bred eurosceptics. Or it might simply be that I don’t like the idea.
Either way, there is very little doubt that something incredible needs to be done if the euro is to survive. If we rewind to the start of 2011, the idea that any one country might leave the EU was thought absurd. Now, the very survival of the currency itself is being openly questioned.
This article from the FT’s Alphaville discusses a paper recently published by UBS about the future of the currency.
I think everyone involved in the eurozone crisis ought to at least read the FT’s summary.
Their bottom line is that if the euro breaks up it will be incredibly painful and costly. I think we all could guess that on our own…
However, they also predict the possibilities of authoritarian or military governments or civil war.
For real.
This is based less on their guesswork and more on the historical precedents.
Do we all hope this won’t happen? Of course.
Could it happen? Of course.
The problem is that the decision making processes have been so slow, for many reasons, that policymakers and politicians seem to be caught off guard again and again. That may of course be the difference between what is said and done in public and what is planned for in private.
But since the concept of a eurozone break-up was a little like Lord Voldermort a few months ago (we dared not speak his name), who knows where this might go in another six months time?
While this fails to convince me about increased integration, it is quite a stark choice.