Wolfgang Münchau Understands the Problem with the Eurozone

The Eurozone requires reform; but most Europeans don’t support the sorts of reforms that could work

In 2017, I published a couple of articles in the journal Political Quarterly dealing with the subject of European identity and the Eurozone crisis. Specifically, I argued that:

The only way to make the Eurozone work is through deeper fiscal integration of Eurozone economies. Yet wholesale fiscal integration cannot be achieved in the near term, due to the fact that EU citizens continue to identify more with their own nationalities than with Europe as a whole.

Reading the Financial Times today, I see that columnist Wolfgang Münchau has come to the same conclusion:

The political shocks in Italy stem from a dysfunctional monetary union and an unsustainable immigration regime. I fail to see how Italy and Germany can remain locked in the same monetary system unless we have reforms that both countries reject, whether it is a political union or a single safe asset, or reforms to align economic and judicial systems.

The EU’s legendary tendency to kick the can down the road has left us with a situation in which it makes no sense to talk about the eurozone crisis in the past tense. Greek and Italian debt are less sustainable today than they were in 2010 when the crisis began, and Germany is less willing to support the eurozone today.

Append his name to the long list of Eurozone-sceptic economists.