German insistence that EU support be directly to Spain’s government and not its banks had two fatal consequences. Adding to Spain’s public debt and possible subordinating existing bondholders.  German taxpayers didn’t want the euro in the first place, correctly fearing it would become a transfer system for other countries’ profligacy.

The choice is no longer between bailouts and no bailouts but between bailouts that work and bailouts that fail.

EU’s member nations have different views and traditions on taxes, public services, redistribution, risk-sharing, public borrowing and every other aspect of public finance which put limits on the scope for fiscal cooperation. Political union would not smooth away these differences – far-right nationalism is already resurgent in many EU countries.

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