Calls for fiscal and politicial union in the EU

Peter Mandelson wants closer fiscal and political union in the EU - see here.  (The link is to the FT website - you will need to subscribe, and some limited access is free)

MEPs (with notable exceptions from the UK - both Labour and the Conservatives voting against) seek the introduction EU financial transaction tax - see here.

The European Commission is seeking to extend its remit into direct taxation in order to 'fund its commitments' - see here.

These are some of the continuing siren calls for political and fiscal union that we were warned about when the EU was created by the Treaty of European Union (Maastricht) and again with the Nice Treaty a few years' later.  The problem for those that call for this is that it is pretty clear that the Germans have no appetite for funding further Greek bailouts, let alone for funding massive international transfers that would accompany the creation of  full -blown EU superstate with political power and fiscal autonomy.

The problems with the Euro have been laid bare - the weakness of the controls were not considered really important in a time of boom in spite of the fact that they were important and we could all see the effects of that boom when Irish investors were using their homes as collateral for spending every increasing sums on property abroad - so feeding a property price bubble at home and abroad at the same time.  When the crash came, the absence of real fiscal discipline on the part of some Governments and the failure of the ECB and other Euro member states to do anything about that absence has meant that the markets now require a large correction and probably a restructuring of the debt of those countries whose fiscal discipline was lacking.

I am sure that I have read somewhere that when the markets require a correction to policy, the problem is that the correction will be larger than the one objectively required to correct the policy as the markets are mean - and that in essence is part of the problem.  Greek living standards are falling now - the fiscal contractions anticipated and required by the markets are going to increase that pressure on living standards.  My instinct is that the pressure will continue until 'the valve blows'. 

The reality is that there is no EU people - demos.  There is no sense of identity with the EU - even those who are fervently in favour of the misuse of the preamble to the Treaty of Rome ('ever-closer union of the peoples of Europe) fail to believe in their hearts that they are EU citizens as opposed to nationals of their own country - they look at the project with political eyes and that is, I believe dangerous.  It has led to the current parlous state of civic society in Greece and elsewhere.