From what I can tell, the Merkel plan is that it is not true fiscal union anyway. It simply imposes more cap and collar restrictions on governments when they set their budgets and ensures that budgets need to be agreed by the EU. Surely a true fiscal union would have central tax collection and redistribution powers? Of course that would be unacceptable to Merkel as the obvious losers would be the Germans.
Instead she is proposing restrictions on fiscal powers that remove the ability of Eurozone nations to act in a way that does not fit the received wisdom of the mighty wisdom of the economic elite in Europe - the same people that have brought us the current chaos.
With the French presidential elections next year, the loss of sovereignty must surely be too much to bear, although the Italians and Greeks seem to have drifted into a takeover by un-elected governments.
What should they do?
- Get rid of the single currency
- Provides 'firewalls' between countries in case of default
- Ensures sovereign control on currencies