Europe's Growing Desire for Political Union

Now that Italian Finance Minister Pier Carlo Padoan has joined calls to create a political union, parliament and budget for the euro zone, it's clear that closer euro area integration is on the immediate agenda. And it's no wonder: The Greek crisis has brought the issue to a head. Greece's new status as a "colony" under tight outside control, much bemoaned by critics of the country's third bailout, now looks as if it may be a precursor to what awaits all the other countries that use the euro.

Padoan's proposals in an interview with the Financial Times -- a common budget and a common unemployment insurance scheme, perhaps even an elected euro zone parliament alongside the existing European Parliament and a euro zone finance minister -- are not particularly unexpected. As an economics professor, Padoan has long argued that a common monetary policy would result in convergence in other areas. "Once the shift is made from several national monetary policies to a single, supranational policy and institution, other policy areas and institutions are affected and face pressures to adjust," he wrote in 2002. "Policy convergence in EMU is really another name for a more complex and ambitious goal: a new model of EU economic governance."