The European Union’s ongoing efforts to create a “closer fiscal union,” especially including the most recent (January 31) fiscal union pact, pose serious legal problems. In practical terms, that may not matter much: even if fully implemented, the reforms will fail to calm the financial markets, and they will disintegrate or become irrelevant long before any court could examine their legality. Still, and for what it’s worth, the EU prides itself on being a “community of law.” How does it measure up?
There’s been a lot of talk that our federalism might come to look like the EU, with Illinois starring in the role of Greece or Italy. However, the institutional differences are far too great for meaningful comparison. For example, Chancellor Merkel can depose the Italian Prime Minister with a phone call; our Constitution does not give the President, the Congress, or for that matter the National Governors Association any such agency in the affairs of a member-state. For another example, the EU (outside the egregious but fairly small Common Agricultural Policy and a few other slush funds) isn’t a transfer union. Our federalism is or rather has become that sort of union. That doesn’t mean we have a smaller problem than the EU; it just means that we have a different problem. For purposes of comparison and instruction, you want to look at a federal system that shares our problem. Come visit Argentina: you’ll see the future, and it doesn’t work.