How many times do I need to argue that the ‘basic’ problem with the European Union is a failure to accept certain Realities?

If you’re sick of hearing it from me, as well you might be, listen to John Kay over at the FT (Note: it’s painful to pay (horror) for news and analysis, but if you want to follow the Eurozone calamity properly you must buy an online FT subscription):

The decisive action they all seek is not really a European solution at all. It is that the German government should write very large cheques – or underwrite very large borrowings.

Whenever you assert responsibility for issues you do not have authority to tackle, you risk a crisis of credibility that undermines the authority you do have. Europe’s leaders see themselves as mustering resources for a war with the markets: a war which they will lose, not just because they will never find sufficient resources to defeat the markets, but because they are really fighting reality

Which is why cross Leftist articles like this one miss the core point:

Reading the press, one gets the impression of a bunch of lazy Mediterranean scroungers, enjoying one of the highest standards of living in Europe while making the frugal Germans pick up the tab. This is a nonsensical propaganda…

Angela Merkel clearly has Italy in her sights. She, and the Troika are scapegoating the Greeks – in order to make sure that should Greece take the rumoured “hair cut” on its debt and restructure, the other peripheral countries – especially Italy – won’t get any ideas and be tempted down the same path of forced debt restructuring, but rather will redouble their efforts to achieve arbitrary fiscal targets on an equally arbitrary timeline (and how’s that worked out for Greece?), and learn to “live within their means”, as the Germans always piously lecture the world.

This is the strategy to prevent what is euphemistically called the “contagion impact”. In reality, it is also called the principle of collective guilt – destroying the livelihoods of thirteen million people for political or ideological or faith based reasons, which is frankly disgusting and unacceptable. Given their own history, German policy makers should understand this phenomenon…

It’s not just about a crude cost/benefit analysis. It’s about Morality.

The ‘Reality’ (as I see it) is that the much vaunted EU Solidarity requires certain minimal levels of discipline by all sides. No-one has ever wanted to talk about this too openly: it’s all too pointed and embarrassing, since to talk about the mutual obligations of Solidarity is money-grubbing and lacking in trust. We’re all Europeans, right? So what’s the problem?

The problem is that the Germans see (not without some reason) many of the southern European belt of countries as being simply unable or unwilling to achieve the necessary level of collective national discipline to make Solidarity credible (running honest businesses and honest accounts, paying taxes, respecting rules – tough stuff like that), and that when these countries fall short (as they inevitably do) they expect Germany to pick up the bill.

Yes, it could cause unfathomable disaster including for Germany if the Eurozone crashes. But is Germany to sit there and be ripped off indefinitely? Is refusing to subsidise the hapless or feckless for ever really "disgusting and unacceptable"?  

Germany, like Atlas, is shrugging.