Or rather, the lack of it. Dublin has had a torrid time this year. Most of Europe was in recovery when Ireland’s second bubble burst – the banking bubble. The government mounted a rescue plan by creating a ‘bad bank’ to buy off all toxic assets, but it was too little, too late. In the meantime, the ‘bad bank’ took too long to set up and it did not work as was expected, and so Ireland’s projected deficit ratio of 32% of GDP for 2011 look set to shoot even higher.

In the meantime, the markets got jittery and borrowing costs for Ireland, Portugal and Spain began to escalate. The EU jumped in and insisted that Ireland takes a bailout. Portugal jumped on the bandwagon and told Ireland to “take one for the team”. Ireland refused, saying that it had enough cash to see it through to Spring 2011. The markets got even more jittery and borrowing costs were driven even higher. Portugal really began to panic. The European Commission began to panic; it can afford to bailout Ireland (1.7% of the European GDP), Portugal (1.9%) and even Greece (2.6%); but Spain, with a whopping 11.4% of the European GDP is simply impossible. It would cripple the eurozone and lead to its collapse.

And so, Ireland got bullied into taking the bailout. As soon as Dublin admitted that Ireland might need the help, the vultures swooped. The bailout would be tied to a review of Ireland’s commercial tax and a few other areas. To use the expression, Europe really does have them by the short and curlies. In the meantime, Portugal has backtracked and disassociated itself from Ireland’s predicament, declaring that its (repeatedly downgraded) finances are, fine.

There is no logical outcome to the argument of European solidarity and political union without fiscal union. You simply cannot reach one… why? Because you can never have solidarity in a capitalist economy when one does not have political and fiscal union.

Put simply; Europe agreed to stop individual states from making a mess of finances, but it was also agreed that a country showing that it is tackling the problem and on the right track should be allowed to do so.

As we have mentioned, Europe panicked because it knows that it can bailout both Ireland and Portugal; but not Spain. And so, in an effort to deflect attention off Spain and to give her more time, Europe has pushed Dublin to accept a bailout that it so desperately didn’t want to take.

In reality, Portugal is just a bystander, but one can rest assured that when push comes to shove (literally) Portugal will also be pushed into taking a bailout, especially n view of its fractured parliament and penchant to resist austerity even though its situation is precarious. The rest of the eurozone can only hope that Spain can do enough to stave off the market vultures.

If the markets (and here Europe must act strongly) begin to send out false jitters, then Spain could topple. If Spain topples, so does the eurozone as a whole. But; as we have said, this little story just confirms that political union without fiscal union is impossible; as is solidarity between nations when one is more at risk than the other. And so, Europe evolves again.