Fiscal union spells more oversight and control

WHY are Ireland, Spain, the United States, Italy, Portugal all facing financial crisis? All share one similar key characteristic. They all have too much government debt.

The Irish debt situation is depressingly simple, with our ratio of government debt/GNP forecast to peak at perhaps 140%. A very large proportion of this, perhaps as much as a third, is as a consequence of the Government decision to underwrite the banking system, with of course the remainder being the overspending that successive Irish governments have engaged in to placate political interest groups. The Italian, French, Belgian, Greek and other debt problems all differ in their origins.

What is certain is that financial markets, after the 2007-2008 financial crisis, are more averse to taking on risk and have a not unwarranted sense that they, rather than governments, are in the driving seat.