Clarification for why I write about the European sovereign debt crisis for new readers: There are a lot of people who believe that the European Union could someday be a significant End Times player. If the European Union were to become a significant End Times player it would likely need to have much more political cohesion amongst its member countries than it has now. The process to create more political cohesion in Europe is a complicated one that is likely going to require more cohesion in areas like fiscal policy (taxation and spending) first as political union often represents the final step of integration.
I sometimes write about issues relating to the ongoing European sovereign debt crisis because I believe the crisis is a potential catalyst that could push European leaders to agree to more cohesion in areas like fiscal policy. In other words, the ongoing turmoil in Europe is a potential event that could help Europe become more like the Europe that many people envision it will resemble during the End Times. With this clarification out of the way, I now share today’s article relating to the European sovereign debt crisis.
Today I want to share some interesting statements that some major European leaders have made in recent days concerning the future of Europe because we have reached a point where major European leaders are now openly discussing the need to push Europe towards fiscal union (the merging of taxation and spending policies) and eventually towards political union.
German Chancellor Angela Merkel is one of the most important, if not the most important, political leader in Europe. She is the leader of Europe’s strongest economy and leader of the country whose participation is vital in any debt crisis management program and in any future European integration. On Thursday Merkel announced that there would soon be proposed changes to E.U. treaties that would “make clear that we must take steps toward a fiscal union to express the conviction that we know policies must be more closely coordinated if you have a common, stable currency”.
French President Nicolas Sarkozy is perhaps the closest European leader to Chancellor Merkel. Merkel and Sarkozy often meet with each other and make important decisions together. For instance, Merkel’s announcement about the proposed E.U. treaty changes came after a meeting with Sarkozy. The following are some news ticker headlines summarizing comments Sarkozy reportedly made a few days ago (the capitalization of every letter is not from me, but the source that reported these headlines):
José Manuel Barroso, the man who heads the European Union’s executive branch with his position as European Commission President, also pushed for more European integration recently when he proclaimed: “It is quite clear, as things stand at present, if we want to keep a common currency, we need more integrated governance”
Two high-ranking officials of the European Central Bank (ECB) also called for Europe to move towards fiscal union (and even financial union) recently. The ECB’s Juergen Stark said earlier this month:
“Further ambitious arrangements may be needed to enhance the robustness of our financial systems…Not only stricter fiscal rules and the creation of a fiscal union are needed, but it has to be complemented with a financial union.”
Meanwhile, the ECB’s José Manuel González-Páramo stated on Thursday that a “significant transfer of sovereignty” needs to take place:
“We cannot completely delegate governance to financial markets. The euro area is the world’s second largest monetary area. It cannot depend solely on the opinions of ratings agencies and markets. It needs economic governance arrangements that are preventive and linear. This underscores my central point that a much more comprehensive approach to economic governance is now the priority for the euro area. And this means more economic and financial integration for the euro area, with a significant transfer of sovereignty to the EMU level over fiscal, structural and financial policies.”
European Council President Herman Van Rompuy, the man who Merkel and Sarkozy nominated to lead a future European economic government, told the European Parliament recently that the focus should be on “strengthening economic convergence within the euro area, improving fiscal discipline and deepening economic union… The task I see for us is clear: we have to bring the economic monetary union to a solid end-state.”
Finally, Chancellor Merkel recently made comments during her political party’s annual meeting about where European integration may eventually windup in the future. Merkel suggested to her followers that the eventual goal of European integration is political union:
The influential European leaders I cited today all are in agreement that Europe needs to integrate more. However, the challenge for them is to figure out how to get Europe to become more integrated. Not every European leader who favors deeper European integration agrees on how this should be done. In addition, European leaders who favor deeper integration are likely going to encounter resistance from people and groups who do not want their countries to surrender sovereignty to a centralized European governing authority.
I think European leaders will eventually find a way to achieve deeper European integration, but it won’t be easy for them.