The Greek crisis only confirms the folly of binding a group of disparate countries together in a currency zone with no mechanism, such as a centralfiscalauthority, to address its internal imbalances.
But the Treasury itself is constrained by the debt ceiling set by Congress, and an independent central bank should not rely on the fiscalauthority for one of its tools.
Considering the reluctance of German taxpayers to bail out other countries, more centralized fiscal authority a solution European Central Bank President Jean-Claude Trichet publicly supported last week is probably not politically feasible.