More to life than economics

Usually it's political commentators who can be criticised for ignoring economics. Numbers? Gracious, they don't affect anything. Anyway, I might have to think hard. Pass the smelling salts.

But this morning both Wolfgang Munchau and Armageddon Evans-Pritchard have interesting economic angles yet stop short of the politics.

Munchau highlights problems in the east European EU economies in typically clear fashion but then veers off to claim that they should have got themselves into the euro faster. Space prevents him exploring just why they chose the slower route. Would the fast track have been practical politics? He says Slovenia and Slovakia are better off for having got themselves in. Is that true of all the PIIGS? What will happen to Austria, whose banks' exposure to eastern Europe is about 80% of the country's GDP?

Ambrose does look at internal German politics. Even if Germany can still afford to subvent other EU countries' debts, bearing in mind the problems of its own banks, "what about the solemn pledge to voters by Germany's political elites – promiscuously given over the years – that monetary union would never leave them on the hook for the debts of half Europe?" To be sure, Mr Steinbruck's erratic pronouncements are a poor guide to likely German policy, especially as his party's electoral prospects look poor.

Economic writers love to focus on the mechanisms which Germany might use to support the PIIGS' debts. But how would the politics work?

It's no good glancing at German politics in isolation or ignoring them entirely. What about politics in the PIIGS? Ireland and perhaps Spain are attempting to put their economies right. Would a lending Germany be content with their present speeds of adjustment? Even if they were, would there be a political price to pay? Wait for the backlash when the first German politician told the Irish that they should show their gratitude for German support by voting through the Lisbon treaty.

What of Greece and Italy? Is there any economic adjustment going on there at all? Germany was decisive in pressing down wages when it faced cost pressures. German voters would surely demand at least such actions from countries they subsidised. Even if Germany could deliver the huge sums required to make a difference, could fractured Italy and disorderly Greece deliver the adjustments? What cries of 'German hegemony' there would be. In political terms the cure might be worse than the present disease. Would it be realistic for Germany to help some PIIGS but not others? Choosing would be a naked sign of a lender's power.

Or might Germany be more inclined to channel its resources towards supporting the banks in its neighbour Austria, where order and adjustment are taken more seriously than in some of the PIIGS, and where German 'hegemony' might be - ahem - less controversial?

Ambrose raises another option.

Architects of EMU were well aware that a one-size-fits-all monetary policy for vastly disparate nations would create serious tensions over time. They gambled that this would work to their advantage. The EU would be forced to create new machinery to safeguard its investment in the euro. It would be a "beneficial crisis", bringing about the great leap forward to full union.

We are about to find out if they were right, he says.

They were wrong. If the vainglorious national politicians give up the rest of their power to run their economies, what is left to them? At present there are still plenty of policy areas where they can look busy enough to satisfy their own egos, and satisfy their voters that they still hold most of the reins.

But that next leap would strip bare their powerlessness (apart from France, which would still find ways round the rules). And at the same time the EU would become the whipping boy for enforced austerity measures. Domestic politics might force some countries from the EU in months.

In itself this might be a good thing. But it might take many years to clear German voters' debts from what by then would be non-EU countries. Would any German party care to defend such a position to their voters?

The economics are fascinating. But at every point those pesky politics intrude.