If only that well-known children's confection in a tube has the answer, then the perennial quandary is; what is the question?
Likewise, if European fiscal union is the answer to the problem, then what is the question that European member states have to ask of their populations?
Market commentators have been frantically pondering the prospect of a European fiscal union this week as leading voices, including the likes of George Soros, suggest this may be the only solution to Europe's woes.
The Euro has never been a perfect solution, one of the reasons why the UK can at least be self-congratulatory about its decision not to join the single currency back in 1998. The creation of the Euro has had many effects. The initial impact was on its Member State's economic growth, interest rates and import/export dynamics. However, the elephant in the room has been that the books were cooked back in 1998 and not all the members were either ready or fiscally competent to join. This has been evident from lack of political acceptance that the Euro is flawed at its heart. Unfortunately for the politicians, the elephant has now woken and is charging around the room. In this climate, both the strong and weak in Europe have much to lose.
Much has been made of the problems in Greece, Ireland, Portugal, Spain and Italy, the so called GIPSI nations. The public reaction in each state has varied from grumbling but stoic acceptance of austerity measures in Ireland to protests and riots in Greece. The irony being that these states have rarely had it as good as they have had it during their membership of the Euro during the last 13 years. Certainly the anecdotes indicate that the older generations in the periphery appreciate the growth and stability the Euro offered relative to their youth when repression and struggle were the themes of the day.
Germany, Finland and France represent some of Europe's strength and public opinion seems to grudgingly accept the bailouts of the GIPSIs although patience seems to be running out in these regions. The dilemma that the political leaders of these nations face though is that their own banks may be completely crippled by default in the periphery. Unfortunately though this point fails to register on the public's consciousness. As George Soros pointed out on Tuesday, people think the problems are in countries like Greece, Ireland, Portugal etc. but they are wrong, the problems are with the banks in countries like Germany in France. So if GIPSIs go bust so do the rest of them.
A European fiscal union may be the only answer. All European member states are currently running their economies with one hand tied behind their backs as interest rates are imposed upon them from the centre but fiscal policy is left to each member to resolve. Something which is achieved with widely varying degrees of success, Germany is highly competent and Greece is highly incompetent.
Maybe it is time for the member states to give themselves over more fully to the single state philosophy and take greater control over the wider European economy to avoid these daily crises which rely solely on political goodwill to overcome. In effect this will mean that the dynamic economies like Germany, Finland and France will need to do most of the hard work to support the weaker nations in exchange for control over spending and taxation in the economy as a whole. There is a role model for this scenario right on the Eurozone's doorstep and it's called the United Kingdom. After all, it is the powerhouse of the Southeast of England that supports, Scotland, Wales, Northern Ireland and the north of England.
The fiscal union could be the glue the region needs to restore confidence and rebuild popular goodwill amongst the very people who suffer as a direct result of this tentative inertia. The problem is going to be explaining this to the various populations. So perhaps the question is; do you want to save your banking system?
Tags: Eurozone, Euro