During a closed-door summit in June, José Manuel Barroso, European Commission president, made a 14-slide presentation to Europe’s presidents and prime ministers on the state of the continent’s economy – but he dwelt on one slide in particular.

The slide had two bar charts, one showing the level of eurozone debt measured against its economic output (about 88 per cent for 2011) and the other showed the US’s, at nearly 100 per cent of its gross domestic product.

Mr Barroso’s message was clear: despite Europe’s debt crisis, taken together, eurozone countries were in better fiscal health than the US, which continues to borrow at exceedingly low rates. Or to borrow from Benjamin Franklin, one of the first great thinkers on the transatlantic divide, either Europeans should all hang together or they will all hang separately.

However, what has given real political traction to the idea of fiscal union – giving Brussels ultimate authority over members’ economic policy, including tax and spending – was last month’s Greek bail-out.

That deal and the subsequent market plunge illustrated that the bullets left to European leaders – after hundreds of billions in bail-outs, tens of billions in bond buying and now billions in Greek bond defaults – have nearly run out. True economic union, which would rely heavily on Germany’s strong economy and balance sheet, may be the only solution left.

Jean-Claude Trichet, ECB president, called for a “ministry of finance for the union”. French president Nicolas Sarkozy urged a “true European economic government”. Even George Osborne, British treasury chief, chimed in, saying fiscal union was the “remorseless logic” of a single currency.

But if this crisis has taught us anything it is to watch what Europe’s leaders do, not what they say. There have been two measures of fiscal union in Europe: rules and resources.

Most of the rhetoric has focused on the rules side of the ledger; Brussels is enamoured with regulations and the institutions that come with them. Strangely, it is in these very rules that the least progress has been made.

Mr Barroso recently unveiled, with much fanfare, the confusingly-titled “European Semester”, where Brussels was given authority for the first time to review national budgets and, country by country, order new measures to harmonise national policies. Nobody seems to remember the recommendations, only two months after they were made.

Similarly, a “euro-plus pact” pushed with even more fanfare this spring by Mr Sarkozy and Angela Merkel, the German chancellor, with yet more eurozone rules was eventually tacked on to the European Semester. It seems to have been similarly ignored.

Most significantly, a much-vaunted package of budget diktats – drawn up after months of debate in a ministerial level task force – allowing Brussels to sanction profligate member states has languished for months in the European Union’s byzantine legislative process because some capitals are reluctant to give up more decision-making to Brussels bureaucrats.

Proposals unveiled last week by Mr Sarkozy and Ms Merkel, to another round of fanfare, were little more than reiterations of these exercises. And there is little sign they will achieve a different outcome.

More impressive progress has been made on resources. A €440bn eurozone bail-out fund, originally intended to be temporary, became a €500bn permanent treaty-based system, and last month was given powers to recapitalise banks, offer emergency lines of credit and buy sovereign bonds on the open market.

However, the progress seemingly stopped there and may now be in reverse. Officials have refused to increase the fund’s size so it can effectively perform those new roles or take the ultimate logical leap in resources by creating a single sovereign bond for all 17 eurozone members.

It also remains unclear if anti-bail-out sentiment in Europe’s core will prevent national parliaments from approving the agreed new powers (calls for legislators to return from holiday early have, so far, gone unheeded).

Then last week came a more ominous sign. A half dozen countries facing bail-out backlash are insisting on bilateral side deals with Greece in order to guarantee their portion of new rescue loans – moves vitiating the very concept of a common rescue system.

Fiscal union may indeed be the debt crisis’s ultimate solution. But it is hard to find the appetite for getting there.

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