Krugman looks at the big picture. I’d say that the small picture is that many Europeans are starting to feel like men from Brussels with orders from Berlin are showing up and putting guns to their parliaments’ heads. Exaggerated? True? Doesn’t matter. This is the politics the actions have wrought.
And here’s what I wrote in 2005 when France said “non” to federal Europe:
The economic union of the countries in question has existed in some form or another for almost 50 years. A financial crisis, not a political one, will signal its demise, if there is to be one.
That’s 8 years ago before there was much trouble, and the title of the post was “France’s ‘non’ and the real estate bubble.” Pretty damn good analysis for the first half of 2005, no?
What is clearer in retrospect is that the EU was always based on the United States and when the federal constitution was rejected in 2005, it left it as an “Articles of Confederation” setup. And remember, the United States needed a civil war to get its internal Constitution perfected.
It seems to me that the big mistake was probably expanding too far too fast which made the thought of a federal Europe just too scary. France, Germany, Benelux, Italy, Spain, Scandinavia, Austria, and maybe a couple more like Estonia or Portugal would have been the place to start with the federal Europe.