MICHAEL EMERSON: Associate Senior Research Fellow, Centre for European Policy Studies.

Maybe the time for the Hamiltonian moment was at the end of World War II, if Europe had then constituted an economic and monetary union, by analogue with the United States coming out of its civil war in 1790. Still the comparisons and contrasts are stimulating debating material.

The twenty-first-century European Union is now acting on the same macroeconomic scale as the twenty-first-century United States. The European Central Bank was the lone star rescue agent over the 2008 monetary crisis, with little fiscal action. This time it is a balanced package of monetary and budgetary action. Not quite a fiscal union, but a huge systemic step in that direction with massive debt-funded budgetary grant programs and commitments to raise new taxes to repay the debt.

The political prerequisites to get this were formidable, yet realized: some leader had to have the guts to propose breaking the taboos, which French President Emmanuel Macron did. The visceral blocker of further integration had to get out of the way, which British Prime Minister Boris Johnson did. The biggest financial power had to change its position over balanced budgets and fiscal transfers, which German Chancellor Angela Merkel did.

A one-time action, or a ratcheting up of permanent fiscal integration? The political declarations are that this is a strictly one-time action. Not many observers seem to believe this. A one-time response to this unique Covid-19 shock maybe, but there will be other shocks to come, and the case for a structural shock-absorbing capacity in principle was already there in theory, and now has a precedent in practice. The new taxes will be happy to become...