Wolfgang Münchau on the eurozone and European unity

Wolfgang Münchau in Chained together Eurointelligence 11/29/2020 explains why he thinks unity among the eurozone countries is a more urgent European economic and political need that great EU integration:

There would have been no eurozone crisis if the monetary union had been accompanied by a small fiscal and banking union from the outset. There would have been no Brexit if the EU had offered the UK a form of membership that did not include a commitment to ever-closer union. There would certainly be no stand-off with Hungary and Poland right now, because the two countries would not be in a position to blackmail the others over the EU budget.

The origin of my fundamental disagreement with Angela Merkel is precisely over this: she prioritised the cohesion of the EU and has been resisting eurozone integration. [my emphasis]

In a recent Eurointelligence podcast, Timothy Garten Ash on central European cakeism, Münchau interviews the British expert on eastern Europe about the current conflict over democracy and the rule of law in Hungary and Poland and how current EU structures make it a particular challenge to address. Ash says he thinks "illiberal democracy" is a term that still applies to Poland, but that Hungary is no longer an actual democracy, "illiberal" or otherwise.

A crackup of the eurozone would be a tremendous blow to European unity. Münchau is still sounding the alarm about the serious weak point of the eurozone construction:

Advocates of an ever-closer union have persistently misjudged the dynamics of a monetary union: that it leads to crises with terrible human consequences, unless it operates a fiscal union, a banking union and an unemployment re-insurance system. We have fledgling versions of all of them, but none work very well.

European banking is more national today than it was 20 years ago. As long as the recovery fund is anchored in the EU budget, it will remain a macroeconomic irrelevance. It should have been a eurozone-level project from the outset. Without more eurozone integration, internal imbalances will keep on widening. As constituted today, the eurozone is still unsustainable. [my emphasis]