Linked by a common currency but not a common economy, the crisis-battered euro-zone nations are facing a pivotal choice: Either move more closely together or risk their currency union breaking apart. But are European voters — some in nations divided by centuries of rivalries — willing to take that leap toward closer integration? The fiercely independent Irish are about to offer a window into the answer. Euro-zone leaders aim to get control of debt crisis: Amid protests throughout the continent against strict austerity measures, European leaders are working on plans to save the euro. From the emerald hills of Donegal to the shores of Cork, the Irish go to the polls Thursday in a referendum on a regionwide fiscal treaty inked in January that would impose strict limits on budget deficits and debt. European governments that ratify the treaty will effectively surrender a measure of sovereignty over two of their most sacred economic rights — how much they can borrow and how much they can spend — to the bureaucrats in the region’s administrative capital of Brussels.
The referendum, in many ways, is shaping up as a litmus test of the willingness of Europeans to more deeply link their economic fortunes. As the region’s crisis deepened, European Commission President Jose Manuel Barroso underscored the urgency on Wednesday, heightening calls for radical rule changes that would begin to make the 17 member nations of the euro zone act more and more like the 50 U.S. states.
A fund drawn from all euro-zone members, he said, should be used to rescue ailing banks throughout the region, shifting the burden away from national governments. In addition, he called for the adoption of a regional deposit-insurance program, similar to that of the FDIC in the United States, and the creation of a regional banking supervisor. He reiterated calls for eurobonds — or collective debt that could replace national bonds across the euro zone — under which the risks posed by wobbly nations, such as Greece , Ireland and Spain, would be offset by the might of the German taxpayer.