WILLIAM R. WHITE: Former Economic Adviser, Bank for International Settlements.

This is far from being Europe's Hamiltonian moment. Consolidating the debt of the thirteen colonies, and giving the federal government the power to tax, were seen by both Washington and Hamilton as indispensable to the construction of a strong federal government.

No such vision drove the establishment of the European Recovery Fund and associated increases in the seven-year community budget. Rather, these developments seem more in the old tradition of "muddling through" in response to whatever crisis threatened to tear the community apart. Moreover, the one-off initiative to deal with crisis-related spending through debt issued by the European Commission, and the limited commitment to "explore" new sources of central finance, fall far short of the permanent measures taken by the Founding Fathers of the United States in 1790.

Yet there are aspects of the recent deal that are remarkably different from Europe's response to the European crisis that began in late 2009. The strong and joint leadership by France and Germany recalled memories of an earlier age in the Community, with Germany accepting policies that it had earlier totally rejected. The normal rules forcing fiscal discipline on member states have been temporarily withdrawn. Not only has there been an acceptance of more community debt, rather than a prescription of austerity, but that debt was for the first time to be issued in size by the Commission itself. Indeed, suggestions for establishing a market "yield curve" implied that further such issues might follow. In addition, some concrete proposals were made, albeit "exploratory," as to how the center might also raise tax revenues on a more permanent basis. Finally, for those wishing to see them, there were welcome hints that the governance of the...