Underpinning the Euro

Economists sometimes ignore the political content of what they know, the political content of what they regard as givens.  In launching the Euro all of the following was predicated; before Maastricht, a decade ago and, in the planning, longer:

- a European state, at least a federal state, with its own federal government and finances.

- i.e. also a federal budget and within it a fiscal policy in the form of federal taxation and expenditure and deficit and debt and debt-management. At the moment the EU has a budget of around 2.25% (sic!) of EU GDP ('based on IMF estimates of 2008 GDP and purchasing power parity among the various currencies, the eurozone is the second largest economy in the world') and it is not allowed to get into deficit (a levy on national VAT proportional to GDP is levied to balance the books in case of deficit).

- a Federal European Central Bank ready to listen to the European Federal Government as promptly and cooperatively as the Fed.

Not yet there, by a long, long stretch, no.  But the commitment, the prior agreement, the certainty on the observation of that agreement -  which was most certainly hidden deliberately from the European electorate -  was so great that a currency that is the second largest reserve currency in the world, used by 327 million Europeans, and with over 175 million people worldwide using currencies which are pegged to the euro,  could be launched without  the democratic assent of the peoples of the member-states to all the political common currency requisites listed above.