Europe formed an economic and currency union without simultaneously developing a political union. This asymmetry led to serious flaws in its monetary system, which ultimately culminated in the inflationary economic bubbles in Southern European states that robbed these countries of their competitiveness. Before purses can be pooled via a fiscal union, the EU needs to build the political union that it so urgently needs. The USA and Switzerland can serve as models in this respect. Europe needs a common legal system, a joint army to defend it against external forces and a central body to discipline net payers and oblige net recipients to comply with the rules.
“Why Europe Could Benefit from a Common Army” (together with Michael Hüther), Süddeutsche Zeitung, February 27th, 2016, p. 24.
“Can the Islamic State Unify Europe?”, (ref. Project Syndicate November 2015).
The Euro Trap. On Bursting Bubbles, Budgets, and Beliefs, Oxford University Press 2014, Chapter 9: “Rethinking the Eurosystem”, Part: “The Path towards Unity”, p. 353-359 (Download). To Amazon.
Ifo Viewpoint No. 138: Alliance of the Unequal, Oct. 10, 2012.