Published 13/01/2012 | 05:00
"There is no example in history of a lasting monetary union that was not part of one state," wrote Omar Issing, former governor of the European Central Bank. The problems of the euro arise from the fact that it is the only currency in the world without a state to back it.
Euroland is not a country but 17 different countries and states. Those who thought up the euro hoped that the problems that they knew it would inevitably give rise to would help push the EU and eurozone towards a United States of Europe under Franco-German hegemony, which has been the end point of the EU project. Jean Monnet, the ideological father of the EU, was always honest about this goal, unlike his Irish devotees.
As the undersigned and his colleagues pointed out when the euro was first established in 1999, one cannot have a stable union without a fiscal union -- that is, a system of common taxes and public services. By virtue of having common taxes and services, richer regions of a state automatically support the poorer regions and thereby compensate the latter, at least to some extent, for the drawback of their not having their own currency with which to balance their payments. States do this by means of their richer areas paying, on average, higher taxes, while their poorer areas receive, on average, more public services.