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The current EU system seems to be a sort of confederation, and I'm not sure there are historical examples of them being successful--but who knows...
If you join into a federal system, then the various policies about the economy and society will eventually work out to reflect the average viewpoint across the whole federal region. For example, you will get the equivalent of Han Chinese immigration into Tibet, or New England desegregation applied to Alabama. Thus you'll get Polish plumbers in England and German economics applied to Greece. (Or Greek, Portuguese, Italian, and Spanish economics applied to Germany, actually. Which is why you want a federation.)
If you choose to retain an entirely local level of control, you'll still be playing by the local rules. You'll have your local version of the church, banking regulation, and energy policy. It might work out good if your church is like France's (ignoring temporarily certain issues) or if your energy policy is like Denmark's, but could be bad if your economic policy is like Iceland's or your church is like Ireland's was.
Maybe there is another way of doing it...
It's interesting to think about how small of a self-contained country you can have; one with it's own currency and foreign policy etc. For example, were Iceland's economic problems the result of a one-time special case, or was it because they don't have enough local financial expertise to run an independent currency? And do you want to live with only the local, possibly parochial, insular, and provincial social attitudes, or do you want to take your chances with having somebody else's views forced down your throat--possibly at gunpoint? Those are the basic tradeoffs.
I suppose mostly it's a matter of whose ox is being gored in any particular case...
It is clear that some richer states - Germany, Finland, the Netherlands do not want this because of the fiscal transfers implied, and most debtor states do. The question is how much is it in all Eurozone members states interest to go down that road, or are the benefits of a common currency simply not worth the costs.
The bigger question is to what extent the greater common good of the whole Eurozone can be realised in the face of the differing interests of its member states and sectors within those member states. Many would argue that Germany has been the biggest beneficiary of the Euro, but that may only become apparent if the Euro collapses and Germany flounders as much as everyone else in the aftermath.
The bottom line is that it may not be so much about what people want, but what people will have to agree to to keep the economic show on the road - and about where the shareout between the costs and benefits, winners and losers ultimately falls.
Index of Frank's Diaries
If you're going to have a common currency, then you need to have common banking laws and uniform tax laws--and enforcement of said laws. You'll need a degree of leveling of the social spending in order to get the taxation equalized. This will make some regions more attractive for workers, so you'll need freedom of migration for work purposes. There will be social changes as Polish plumbers turn up in Yorkshire in mass to ruin the wage structure, and as London bank employees start pumping up the real estate prices in nice resort places in eastern Europe.
Isolating the problem to one of currency stability isn't going to be enough...
Supposedly that's what was happening in 2004-8.
And then we discovered that we didn't have a fiscal authority, or a bank regulator.
If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa
It seems to me that this all gets back to the question of whether Ireland (or any other European country) wants to be part of a federal Europe, or a confederated Europe, or retain local national control.
It's not about consistency, or institutional fair play. It's about prosecuting your agenda and denying the bad guys the ability to prosecute theirs. And the rest are just useful innocent frauds for the people who need to believe that politics is civilized.
Austerity can only be implemented in the shadow of a concentration camp.
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