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In December, 2010, E.U. leaders agreed to propose an amendment wherein the financial emergency rescue fund would be replaced with a permanent crisis-finance program. The amendment would permit the States having the euro as currency to establish a "mechanism" if it is "indispensible" for the health of the euro.  Interestingly, all of the 27 State legislatures would have to ratify the amendment, though no referenda would be required on account of the amendment being of insufficient scope to trigger them.
According to Marcus Walker and Charles Forelle of The Wall Street Journal, longtime "supporters of European integration are pushing for bold political action to demonstrate Europe will do whatever it takes to defend the euro. A failure of the currency could presage the collapse of the EU itself." (p. A8)  This asseveration is a bit too dramatic; the E.U. existed before the euro and thus can exist apart from it.  The symbolism of the failure, however, would doubtless slow further European integration. So E.U. leaders have responded to fortify the currency. Besides the proposed amendment to provide for a permanent program, the ECB bought E72 billion in government bonds issued by Greece, Ireland, and Portugal. The central bank is as of December, 2010, set to double its capital base, to E10.8 billion from E5.8billion by taking in contributions from the euro zone regional banks. Germany has resisted the E.U.'s attempts to issue or guarantee debts collectively, which would prompt markets to view the euro zone as a single entity. One would think that the EU's common market would be sufficient for the E.U.'s economy to be viewed as one entity. In any case, by acting at the E.U. level, the State leaders could "put this crisis to bed," according to Simon Tilford of the Centre for European Reform in London (Walker, p. A8). Tilford adds that this is a political rather than an economic crisis. Economically relative to the 50 U.S. States, the 17 E.U. States that have the euro had a combined deficit of 6.3% of GNP (11.3% in the U.S.), and a public debt of 84% (92% in the U.S.). Furthermore, unlike the U.S., those E.U. States have a negligible trade deficit. It can be said that the political challenge facing the EU dwarfs even the financial problems. This is not on account of the political fallout from the euro; rather, the way in which the E.U. responded to the financial problems in 2010 points to political problems in the E.U. itself.

According to Timothy Garton Ash at Oxford University, if the euro ends, the question would be "what the European Union then is." (Walker & Forelle, p. A8)  The political existential problem surpasses the financial crises even if the latter pack more of a punch at the pocketbook. Responding to the political problem, fiscal union has been said by some to be necessary for the E.U. In December, 2010, when Greece and Ireland were "under virtual stewardship" of the EU and Spain and Portugal were not far behind, German Finance Minister Wolfgang Schaeuble said, "In this crisis Europe will find steps toward further unification."  While Spain's unknown losses in its banking sector amid the deflation of its housing bubble seem to be more baleful, it can be pointed out that the residential mortgages are 60% loan to value (whereas in some States in the U.S. this figure is over 100%). Furthermore, only 2.6% of the residential mortgages in Spain are more than 90 days past due (though this does not count forgiveness periods). The need for further European <i></i>political<i></i> integration may not be as flashy, but it could well be more important to Europe. I am not arguing that the banking crisis is not significant and should not therefore be attended to; rather, I am suggesting that the most immediate fix may be overshadowed in even the medium run by the need to balance fiscal and monetary policy by having at least a share of both at the E.U. level.  Moreover, federalism itself requires balance; too much power at the State level can lead to dissolution just as too much consolidation at the union/empire level could suffocate the inherent diversity within the union. E.U. leaders could engage in a balancing act wherein they simultaneously shift more governmental sovereignty from the State governments to that of the E.U. while fortifying buttresses protecting Europe from the E.U. eventually consolidating power like what happened in the U.S. through the twentieth century.  I submit that fixing the E.U.'s political/existential problem is much more difficult than fixing the banks.  Adding to the problem here is the relative invisibility  and the lack of apparent urgency of the political problem.  What is the E.U.?  This is not as hard to answer as one might suppose.  The E.U. is a modern federal system on the empire-scale. That is, the E.U. has a government, which is dual-sovereign with its State governments--popular sovreignty being the unity transcending the governmental duality.  The political problem given what the E.U. is, is more difficult to define and solve. Creating a new fund will not cut it. 

Sources: Marcus Walker and Charles Forelle, "Bailout Deal Fails to Quell EU Rifts," WSJ, December 17, 2010, pp. A1, A8' Marcus Walker, "Closer Fiscal Union: A Collective Guarantee," WSJ, December 17, 2010, p. A8; Brian Blackstone, "ECB Seeks Funds for Capital Base, WSJ, December 17, 2010, p. A10.