Europe needs an all-encompassing deal to save itself. The crisis is now about the survival of the euro, so it requires a big response; nobody will be spared if the euro collapses. A sensible compromise would be to impose greater discipline now, in exchange for the eventual introduction of conditional Eurobonds. A paper by the Brussels-based think-tank Bruegel adds the need for a euro-zone finance ministry, with power to raise its own taxes and to oversee the banking system.(Emphasis added). Also:
Germany also wants a new covenant: EU treaties must be changed so that national budgets are scrutinised by Brussels, with powers to impose “automatic” sanctions on countries that stray. This would be backed up by the European Court of Justice. The Germans think only a treaty commitment and the power of the judges will ensure that vows of discipline are honoured.(Emphasis added). And:
The euro’s design was flawed, without fiscal integration or a central bank to act as a lender of last resort. If so, what is needed is greater mutual support: joint Eurobonds to mutualise at least some of the debt, as suggested by the European Commission, and perhaps a change to the statute of the European Central Bank (ECB).
What they are talking about is a European federal government.
Now, I don't want to fall into the trap of attributing to genius what is the result of stupidity, but it is awfully convenient (at least for the bureaucrats that actually rule Europe) that the "only way" to fix a problem caused by integrating the disparate economies of Europe is greater integration. Unfortunately, Greece and the others took the suckers bet of easy money if they adopted the Euro, and now they are facing losing their sovereignty.