Lots of talk has been growing lately about the fate of the EU in the midst of by far its biggest economic crisis in its still short existence. Some have even gone so far as to say that the EU will collapse, that it was always going to collapse, or that it should be ditched, anyways.
The EU was and still remains a good idea. As a cultural achievement it is unique, and as a recipe for further cooperation and cultural ties, it remains potent. The economic problems of the European bloc are largely independent of the EU existing or not, with the only real drag being that countries like Greece can not affect their money, as they are tied to the Euro. Their debt issues, however, are not an EU cause and effect.
Monetary issues aside, the EU is not in its final throws or doomed to insolvency. The new "fiscal union" is still a bit wishy-washy but it's a definite step in the right direction.
One looming problem is France and Germany and how they have wrangled such control over the EU, with Central and Eastern European members publically complaining about their diminishing political role. Merkel and Germany want to bring in "Ordnung" and a more focused drive on austerity and low wage growth and such, and that's a fair suggestion, considering how America's systemic debt wreaked havoc on the economy, but with France and Germany offering the only two visions for the EU so far, and both of them being rather long term in nature, someone needs to step in and convince the investors and bond markets that in the short term, defaults/state bankruptcies aren't going to happen. The ECB needs to be fully involved at this point, but the Germans aren't letting them introduce cash into the system. Austerity is a good long term solution, but growth is the biggest issue right now, particularly in southern Europe. But with the UK - well, Cameron at least - continuing to want to be a footnote in Europe, there may not be any country that can offer a third option to Germany and France.
However, one of the root problems has been, and continues to be, the EU's low growth. This model of low growth, low consumption, low inflation, low unemployment, and low wage increase, is the model that Germany has followed and tried to push, but it's just not the best model to follow. This is why austerity isn't going to work right now, and why Germany's race to the bottom through trade surplus has been so damning to the EU.
Besides general reform to make the EU more efficient, less susceptible to corruption, etc., Germany needs to stop fighting the Eurobonds move, more bailout money needs to be offered to countries that require it to be kept afloat, and the ECB needs to be allowed to inflate the Euro. The lack of monetary flexibility and resistance to it is just throwing a wrench into the whole system. The problem is that individual countries inside the EU can't inflate or deflate their currency to meet economic needs, since they're all tied to the Euro. But if the ECB can't influence the Euro, then one of the most crucial elements on the table is gone.
Then, Germany just needs to give up its current economic trajectory. Low growth and siphoning wealth away from other countries via the trade surplus throws everyone under the bus, including Germany if the whole system fails.
China has already offered gobs of money to the EU, but has requested trade normalization, which the west, seeing China as the big bad boogey man, seems hesitant to do. But both the US and China have huge vested interests in the EU, particularly China, which, as an export based economy, needs that market to retain its (the EU) consumer spending. China is also trying to buy influence on an international stage; what better way then to help the EU with some money when needed? And while Germany is part of the problem, as I alluded to, they have the money and resources to help alleviate it.
Unfortunately, a lot of the conservative groups are switching this economic debate into a political one, and trying to limit the central bank, regulation, and labor laws. Those won't inherently fix the growth problem - see, the US. Monetary fixes and spending are what is needed to be done, which neither ideological base seems intent on. Sometimes, you have to bite the bullet. Hardcore, compromise-less ideology does not always work in politics. Did anyone in the US want to see tax money given to car companies? Not particularly, but the alternative was much worse. Same with the EU. Do we want to see the banks and governments get our money? No, not really. But more people don't want a severe depression, either.