Writing in this column two months ago, I suggested that Treaty change would be needed to save the Euro. Where once such talk was taboo, it is now clear that we are faced with such constitutional change, irrespective of the UK position. A real fiscal union would involve transfers to those regions for whom a one-size-fits-all monetary policy is inappropriate. What is in prospect is not a fiscal union, however, but an austerity club.
European leaders have finally realized the need for bold reform, but they’ve completely missed the point. The Eurozone crisis is less about members’ debts, and more about their competitiveness. Continue reading