Andrew Glencross post highlights a crucial shortcoming in the construction of the Monetary Union as defined with the Maastricht Treaty. Before Maastricht we knew that the monetary union to work effectively required also an economic and political union. The McDougall Report indicated that it required also a budget of about 5-7% of GDP to ensure convergence and cope with asymmetric shocks. But France preferred to keep economic, fiscal and political sovereignty at national level. Therefore only some convergence criteria were established. These were indispensable to avoid incentives to free ride endangering the whole monetary union. That logic has been applied ever since and it has been strengthened by the Stability and Growth Pact, the Six Pack, the Two Pack and the Fiscal Compact. The resulting paradox is that Member States of the EMU are subject to more budgetary and fiscal constraints than those of any fully-fledged federal system. And at the same time they cannot count on federal budget, policies and solidarity. National fiscal sovereignty on the budget basically ended with the Maastricht Treaty. But political elites did not dare to tell this truth, because this would make it impossible to make astonishing electoral promises, especially when they are in opposition. This has produced the current difficulties.

It is time to reform the Eurozone, creating a fiscal and borrowing capacity able to sustain a European Treasury, incorporating also the ESM, under the management of a Treasury minister/Vice President of the Commission, responsible in front of the Parliament and the Ecofin. This would contribute significantly to re-create a European democratic space to let the citizens decide about the EU fiscal stance and economic policy.