Fiscal Union, German Style
German Finance Minister Wolfgang Schäuble has a proposal for European fiscal union:
Schäuble: In an optimal scenario, there would be a European finance minister, who would have a veto against national budgets and would have to approve levels of new borrowing. It would be up to the individual countries to decide how to spend the approved funds, that is, how to answer the question: "Should we spend more money on families or on road construction?"
That's a clown proposal Wolfie.
Matt Iglesias puts it more concretely. Aside from requiring European countries to paste their sovereignty to the bottom of Germany's boots:
... the really goofy thing here is that Schäuble's plan still doesn't do anything to fix the problem of differential shocks. All it does is codify into law the principle that if something bad happens to push Finland's unemployment up, that the Finnish government will have to respond by implementing fiscal policy that exacerbates the recession.
Germany does not appear to be serious about saving the Euro. My guess is that the price for saving the Euro keeps going up - crunch time might be here already.