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Comment by jonnathanson | Hacker News Reader

At the end of the day, the Europeans can't have their cake and it eat, too. Either the Eurozone is a truly integrated, multinational superentity, or it's a meaningless construct on top of a group of wholly independent nations. It can't be the former when things are going well, and the latter when things are going poorly. A fairweather EU / economic zone doesn't work, because it's built on a foundation of quicksand.

How can these countries rely on a cooperative economic superstructure when, beneath it all, they still see each other as competitors? Transnationalism doesn't work when you're secretly a nationalist.

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I agree that a fairweather Eurozone is not sustainable and that at least a fiscal union is needed (through good times and bad times, till war do us part). Luckily, many young people like the idea of a stronger united Europe, so hopefully it's just a matter of time until the public perception shifts. If the Euro just survives for another decade or two it's probably going to turn out OK.

The idea of a united Europe scares me, actually.

Whenever there is fiscal union comes the notion that there should be some control over how money is spent. Germany and Greece and Spain and Sweden and Italy and every EU country will want a say. After all, it's "their" money.

So there are going to be fundamental game theory problems unless all these different places can agree how money should be spent--and ideas about how money should be spent are a big, deeply embedded part of culture. If a fiscal union happens I would venture to guess one of the following will happen: one, eternal squabbling; or two, a partial homogenizing of European culture. I don't like either outcome. Differences are good.

No, no amount of high hopes or good feelings will save you from this. I don't understand the urge to yoke societies together in unhelpful ways any more than I get why incompatible people enter bad marriages. It's always been obvious to me that takes more than love to work together, and often people work better together if they intentionally keep their independence.

I doubt that Norway wants or has any chance of getting a say, due to minor reasons like not being a member of the EU.

Thanks, edited. Not sure why I said Norway... probably was thinking of Sweden. Actually, they'd hopefully be smart enough to step out of a fiscal union.

Edit: to downvoters: Sweden is part of the EU and so far has been avoiding monetary union through a loophole.

Incidentally, Sweden is not obligated to join the eurozone due to a neat loophole.

Uh, Switzerland, anyone? Quite a lot of culture difference in a country that has a lot more than just fiscal unity. I'd say, more than in most countries that are a lot bigger, both geographically and by population size.

Actually, here in Poland, EU slowly (too slowly) forces us to accept our own cultural diversity.

Stop panicking. If our culture was defined by our banking system then we wouldn't have that much of a culture.

Switzerland, but also US. Some Europeans tend to see U.S. as a monolith while in reality they're quite diverse - the difference between New York and Nevada is as big as between Poland and Spain.

Well, yes, I realized that soon after posting, didn't want to go back and make a post flood though.

Also, I'd be surprised if this wasn't true for every sufficiently big country. I'm almost sure it's true for China, and that's even though their government isn't exactly the most supportive of cultural differentiation.

> If a fiscal union happens I would venture to guess one of the following will happen: one, eternal squabbling; or two, a partial homogenizing of European culture. I don't like either outcome. Differences are good.

Aren't a more homogenous culture and some amount of quibbling a small price to pay for a Europe where war between nations is inconceivable? I mean isn't that the far scarier outcome that was one of the motivating factors behind creation of the Eurozone/EU?

It's hard to know exactly what a truly integrated, multinational superentity is, though.

For example, in this case Spain did everything right. They even regulated their banks so they wouldn't make risky loans. But they couldn't stop German banks making the same loans - so does this mean that regulatory authority over banking should be seceded to the EU too?

Spain did a lot of mistakes. I.e. not to take any action to stop the real state bubble, create unnecessary infrastructure, or the fact that a plenty of youngster stopped their education in order to work as construction workers.

My understanding is that they did try and stop the real estate bubble (to some extent anyway) but regulating bank loans, but the German banks stepped in to fund riskier projects.

Unfortunately, many Spanish commercial banks and saving banks bet the farm on the real state market. For example the Sabadell Bank just bought the CAM (a saving bank) for one euro.[1]

The were some talking about burst the bubble in 2004, but Zapatero's government never implement the reforms. The Spanish prime minister regret later about not bursting the bubble earlier.[2]

Spanish banks are well protected against loans because, the asset pledge as collateral" clause is rarely use in Spain.

[1] http://www.businessweek.com/news/2011-12-08/sabadell-buys-ca... [2] http://www.elmundo.es/elmundo/2011/06/28/suvivienda/13092749... (Spanish)

Sharing currency without forming a real united federal government was one of the least intelligent decisions in recent history.

Their mistake was to join the Euro.

Yes, IMHO this should be the goal. Coupled with directly elected European leaders. This election campaign would be a hit. Of course,... writing a post is easy. Getting this done requires a political genius.

Maybe they could piggyback on the Eurovision voting infrastructure.

Doesn't the USA try and have its cake and eat it? Is federally decided economic policy a good fit for all areas?

Yes, undeniably, as proven out over the past century of growth. Is there a serious argument to the contrary? No, federal policy isn't "equal", but pretty much everyone (even the "losers" in wealthy states like California) agrees that the country is economically stronger as a union.

Yes, but the key difference is that the states that comprise the USA don't act as their own, sovereign nations. Imagine if California and Texas, for example, were independently represented in the United Nations, had independent economies linked only by a shared currency, and listened to the federal government only when they felt like it? That's more along the lines of what the EU is.

The USA made the conscious decision to be a unified, federalist nation. The EU is "trying to have its cake and eat it, too" in that it won't go that far. It wants the benefits of federalism with the benefits of independent national sovereignty. What it gets, instead, is neither one nor the other.

Agreed, and I'd like to point out that the USA did attempt a form of loose federation under the Articles of Confederation. It didn't work very well, and although it took a lot of cajoling to convince the various states to submit to a federal authority, it has worked much better.

But state debt varies widely across the country. US states can issue bonds, and have individual credit ratings.

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