Marty Feldstein on why Europe does not work. He says it is not like the US at all, as it lacks an integrated labour market, centralised tax and spending powers, and proper budget rules at the local level.

He might have added that not only do they lack central fiscal authority, but they lack political consensus on intra-union transfers.

Australia struggles with sniping between states over horizontal fiscal equalisation, and most rich-State Aussies do not mind that they are carrying their brothers in the poorer states.

Without that inclusive attitude, fiscal union just will not work.

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