An economist blogger ( V. Ramanan ) has unearthed some clear commentary by Nicholas Kaldor from 1971 setting out the problems inherent in an economic union without political and fiscal (tax and expenditure) union.
Very few people state the obvious about the EU - that if there is to be a Union, it must be of shared resources, as well as shared obligations.
As the there is no will towards political union in the powerful ruling layers who dominate the EU, there is an impulsion towards acrimonious break up.
The idea of a fiscal/tax union without full political representation for citizens is a recipe for social warfare - the history of the poll tax, and "no taxation without representation" should be enough evidence of that.
The idea of a union in which parts of the EU economy will have the leeway to rack up crazy debt, and then parts of the population allowed to starve to recoup the loans, is not sustainable. But without a redistributive budget, with a constant recirculation of taxes from the stronger parts of the Union to the weaker, there would be a tendency for the stronger states to periodically blow up bubbles in the weaker with cheap credit.
… Some day the nations of Europe may be ready to merge their national identities and create a new European Union – the United States of Europe. If and when they do, a European Government will take over all the functions which the Federal government now provides in the U.S., or in Canada or Australia. This will involve the creation of a “full economic and monetary union”. But it is a dangerous error to believe that monetary and economic union can precede a political union or that it will act (in the words of the Werner report) “as a leaven for the evolvement of a political union which in the long run it will in any case be unable to do without”. For if the creation of a monetary union and Community control over national budgets generates pressures which lead to a breakdown of the whole system it will prevent the development of a political union, not promote it.(Kaldor, N. Essays, published 1971)Under this system, as events have shown, some countries will tend to acquire increasing (and unwanted surpluses) in their trade with other members, whist others face increasing deficits. This has two unwelcome effects. It transmits inflationary pressures emanating from some members to other members; and it causes the surplus countries to provide automatic finance on an increasing scale to the deficit countries.
Americans, with the historic experience of the forming of the United States, know perfectly well that long term, without a distributive budget, and with a common currency or fixed exchange rates, the EU could never work.
The Daily Beast has consistently published articles pointing to the economic imbalance between stronger and weaker economies in the EU and to the fact that without a redistributive budget, as well as fiscal union, the Euro and the Eurozone cannot function and is heading for breakup.
How the euro is the cause of the eurocrisis
German politicians pressurise Greece
Huge amounts of resources are being poured into a model that is fatally flawed and can never work.
The options are to break up the Eurozone and return sovereignty entirely to national level, or to walk away from the EU and remake a political union in which "One is for All, and All for One." The current arrangements will not last.