German Chancellor Angela Merkel, in a speech at her party's annual gathering this week, declared that Germany -- and Europe -- must address the problems in the economic union by creating a political union. The European financial crisis is threatening to snowball from small, periphery states such as Greece and Ireland to the world's eighth largest economy, Italy, and possibly even the fifth largest, France. Even if Europe can save Italy, and even if France does not fall into similar crisis, the European Union's awful year has exposed some real flaws in the monetary union.

Some economists (the ones not calling the entire European experiment doomed) argue that what Europe needs is a fiscal union to make sure that the state economies behave responsibly and in some kind of sync. Integrating some of the world's largest economies under this kind of unified fiscal authority would be a big deal. But Merkel wants to go one very big step further. "It is now the task of our generation to complete the economic and currency union in Europe and create, step by step, a political union." She warned that Europe had entered "the most difficult hours since World War Two," drawing a pointed contrast to the event that led to the creation of the European Union in the fist place.

A politically unified Europe -- the most likely version of which could best be described as the Federation of Europe, something akin to the earliest union of American states -- is not as crazy as it might sound. The reason that Europe needs a fiscal union is to oversee its monetary union, which seems destined to fail without that fiscal oversight. But a fiscal union might have the same problem without a political union; how a nation decides to gather and spend its money is, after all, one of the chief functions of its political leadership. So Merkel is making a smart, if politically risky, call for political unity. But this is about more than just finding the most comprehensive solution to the sovereign debt crisis. Since the end of World War Two, Europe has been moving toward unification so consistently and inexorably that it sometimes seems as if world events were conspiring to create a united Europe.

Europe's continental integration first began, as with the Coal and Steel Community, as a response to the devastation of World War Two: the countries needed a way to recover, and to try to prevent future war. Meanwhile, the rise of the Soviet Union gave European governments even more incentive to integrate. In 1948, several European states signed a collective defense treaty to counter the Soviet threat. That treaty was soon expanded to include the U.S. and became the North Atlantic Treaty Organization, or NATO. It might have remained little more than a defensive treaty had it not been for the Korean War, the difficulties of which forced European militaries to integrate under NATO's command.