It appears that the Eurozone leaders have decided to halt the crisis that they have been in recently. They have agreed to provide a third bailout to Greece, subject to certain conditions that the Greek government has to meet by 15th July 2015.
A lack of political union is being cited as a primary reason for the current crisis in Europe. In this context, some of my colleagues have attempted to compare the Indian Union and the European Union and contend that the EU is aspiring to do what India did in 1947.
Although initially I did not agree, with time and more reading I partly agree with the hypothesis. EU is indeed trying to do what India did in 1947, but it has been trying to do so since 1958. At the time of independence, India faced a problem of political unity; a common currency across most of (today’s) India already existed. The Euro Zone, on the other hand, comprises of several states with independent governments that have agreed to be a part of a monetary union — ie., an adopted common currency.
In this context the words of the English Economist Nicholas Kaldor sound prophetic
… Some day the nations of Europe may be ready to merge their national identities and create a new European Union – the United States of Europe. If and when they do, a European Government will take over all the functions which the Federal government now provides in the U.S., or in Canada or Australia. This will involve the creation of a “full economic and monetary union”. But it is a dangerous error to believe that monetary and economic union can precede a political union or that it will act (in the words of the Werner report) “as a leaven for the evolvement of a political union which in the long run it will in any case be unable to do without”. For if the creation of a monetary union and Community control over national budgets generates pressures which lead to a breakdown of the whole system it will prevent the development of a political union, not promote it.
Another important difference between the EU and India is that the individual Indian state derive its legitimacy from the Union. This is sorely lacking in Europe, where the Union draws its legitimacy from the individual members.
It is therefore safe to contend that the Indian experiment is actually a success, at least when compared to the ongoing European experiment, whose results are not yet out.