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We keep running circles around the elephant in the room, which is that the EU needs to fund accumulation of productive capital in the periphery in ways that imply net fiscal transfer from the core, or "surplus recycling", or "repatriation of surplus".
You can give a man a fishing pole, but unless you teach him how to fish..... ?
BTW, isn't what you are suggesting basically an enhanced version of structural and cohesion funds?
The problem that I see is that there is an underlying issue of ability to compete that is going to require either massive emigration from the periphery, or the development of a domestic ability to compete in those countries. The dilemma is not entirely unlike what happened as the US market was integrated in the 20th century. The South couldn't compete, so there was massive emigration to the North. Finally, the development of a strong federal government allowed the redistribution of wealth from the North to the South.
But that sort of redistribution required a strong federal government, which the EU does not currently have.........
Let's be honest, the development of that sort of capacity in Europe was basically mean the end of the sovereignty of the nation-state in Europe.
Do we really believe that the Czechs and other euroskeptics will allow that?
And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
The only viable options are to dismantle the monetary union or create the federal institutions necessary to perform those tasks. If the latter is politically unpalatable, the former will happen - voluntarily or messily, but it will happen. Because there are quite good reasons for sovereigns to exist, and those reasons don't go away just because you legislate neoliberal fantasies that assume away all the reasons for sovereigns to exist.
Friends come and go. Enemies accumulate.
Monetary union means the loss of sovereignty, because the state is no longer definitionally solvent and can thus not engage in a number of tasks conventionally considered a requirement for sovereignty (such as domestic macroeconomic planning).
deposit insurance for banks
granting limited liability to businesses
access to health care
access to education
access to legal redress
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