Assuming Euro leaders DO MANAGE to get some sort of fiscal union agreed, what of it? That fiscal union will in effect be much the same as the current arrangement, in that it will involve imposing austerity on uncompetitive countries. And the austerity will have to last years before such countries become competitive, by which time they’ll either have been reduced to anarchy or will have opted to leave the EZ.
And COMPETITIVENESS is the CRUCIAL point, as Martin Wolf explains, not deficits or debts. That’s why I advocated an instant devaluation of periphery currencies here in September. The latter solution would be expensive and difficult to organise, but it’s the least bad solution, I think.
Expect long boring articles in newspapers making the above point in the months and years to come.